The soaring cost of renting has made it harder than ever for renters to scrape together a decent deposit for their first home.
Low-deposit mortgages are designed to help. These deals mean it’s possible to buy a place with a deposit of 10%, 5% or even 0% of the property’s value. Plus there are some schemes that can help, too.
So here’s a guide to what’s available to help renters buy a home sooner.
What is a low-deposit mortgage?
A low-deposit mortgage lets you buy a property with a deposit as low as 5% or even less.
That means you’re stumping up 5% of the value of the property you want to buy, and borrowing 95% of its value from your mortgage lender.
Say you want to buy a house valued at £200,000. If you can get a 95% mortgage, you’ll only need to provide a £10,000 deposit (5%).
The amount you borrow for your mortgage is also known as the loan-to-value (LTV) ratio. So if you get a loan that’s 95% of the property’s value, you’ve got a 95% LTV mortgage.
Low-deposit mortgages are generally 90% LTV, 95% LTV and higher.
Lenders are taking a bigger risk when they lend almost the whole value of a property. Interest rates for these deals reflect that - rates are typically much higher than deals where you have a bigger deposit and carry more of the risk yourself.
It’s important to be aware that with low-deposit mortgages, you don’t have much buffer in the event that house prices fall. This means you could end up with a mortgage that’s more than the value of your property, which is called negative equity.
What’s the smallest deposit I need for a mortgage?
The average deposit for a first-time buyer in England in 2026 is around 20%, according to UK Finance.
Banks usually want you to have a deposit of at least 5%. But 2% deposit deals and even 0% deposit deals exist (0% deposit is also called a 100% mortgage).
The minimum deposit varies between lenders, but usually, the higher deposit, the better the deal.
There are certain deals where the minimum deposit is stated as an amount of cash, rather than a percentage. In May 2026, Halifax launched a “£5,000 deposit” mortgage, for example, with a maximum LTV of 98%.
The key is to look at everything available to you, and compare rates, fees and terms. If you’re a first-time buyer, this can be particularly tricky, which is why using a broker can really help you navigate the market.
Will Rhind, mortgage expert at Habito by Monzo, says: “There are so many low-deposit options for first-time buyers, and deals have different criteria. This is why it's so key to get a broker to shop around for you."
Can I get a mortgage with no deposit (0%)?
It’s possible to get a mortgage with zero deposit, which is called a 100% mortgage. In 2026, Skipton Building Society has been offering a 100% LTV mortgage called Track Record.
100% LTV deals are designed for first-time buyers who have a steady income and solid record of paying bills and rent on time.
Some deals involve having a guarantor like a family member, or require you to offer something extra as security, like savings.
Monthly repayments could increase depending on the mortgage type and interest rate changes.
Find out more in our guide to 100% mortgages.
Mortgages with a 2% or 3% deposit
Mortgage deals that are 97% and 98% LTV exist but typically come with strict conditions. For example, applicants for the Lloyds deal (98% max LTV) must pass strict affordability checks and can’t be buying a new build or shared-ownership property. And the deposit must be money that wasn’t a gift.
These deals are scarcer than 95% LTV mortgages and are designed for people with low savings but good income.
5% deposit mortgages (95% LTV)
This is the most common type of low-deposit mortgage for first-time buyers. When we checked in May 2026, there were well over 300 95% LTV first-time buyer rates available, according to Moneyfacts, May 2026.
Find out more about these in our guide to 5% deposit mortgages
How much can I borrow with a low deposit?
Usually, many lenders may allow borrowing up to aroun affordability and lending criteria (or your combined annual income if you’re applying with a partner or family member) on a mortgage. This is the case for both lower and higher deposit mortgages.
So, for example: if you want to buy a £200,000 home with a 5% deposit, you’ll need to get a mortgage of £190,000. This means you’d have to be earning about £42,200 a year.
If you have a lower deposit, your lender is likely to be even stricter with its affordability checks.
Our mortgage calculator can give you a clue about what size of mortgage you could afford based on your current income.
And there’s more about how much you can borrow in our dedicated guide.
Am I eligible to apply for a low-deposit mortgage?
To get a mortgage with 95% LTV or above, you’ll typically need to have a good credit history, because these deals are more risky for lenders and they want to know you’ll pay on time.
They’ll also closely check all your finances to be sure you can afford the monthly repayments. You can be a first-time buyer or a home mover (you had a home previously).
There are eligibility criteria for 95% mortgage deals that are backed by the government’s mortgage guarantee scheme, which launched in 2025 (there’s more on how it works in the section below about the scheme).
Under the scheme, you can apply for one of these mortgages if:
- You have a deposit of 5%-9%
- The property is your main home
- It’s a repayment mortgage, not interest-only
- You pass the affordability checks
Offset and guarantor mortgages aren’t part of the scheme.
How does your credit score affect your deposit?
In general, the higher your credit score, the higher your chance of being approved for a wide range of deals. An excellent credit score can help to make up for a small deposit. And if you have a bad credit history, you’ll usually need a bigger deposit.
You can find out your credit score for free and it’s worth doing this before you start any mortgage application. It’s also important to avoid applying for credit cards and loans in the run-up to applying for a mortgage.
More on this in our guide to credit scores.
Pros and cons of buying with a small deposit
Is a low deposit mortgage the way to go? Let’s take a look at some of the potential benefits and downsides.
Pros
- You can buy a home sooner and stop renting. You don’t have to spend as long saving up for a deposit so that you can buy a property more quickly and start paying off the mortgage and building up equity in your home.
- Becoming a homeowner is more achievable. If building up a big deposit isn’t an option for you, a low deposit mortgage can help you buy more easily.
Cons
- Your interest rate will likely be higher. As lenders consider low-deposit mortgages riskier, they’ll usually charge higher interest rates to compensate for that. Meaning your monthly payments will be more expensive. It can be worth saving longer for a bigger deposit to get a cheaper mortgage deal.
- There are fewer mortgage deals to choose from. Not all lenders offer low-deposit mortgages, so your choice will be more restricted. That said, when we checked in 2026, there were hundreds of low-deposit mortgages available, so this is less of a consideration than it used to be.
- There’s a risk of negative equity. With a small deposit and a big mortgage, you run a greater risk of getting into negative equity. That’s where the value of your property falls, and you end up with a mortgage loan worth more than your home. Being in negative equity makes it more difficult for you to move, as the money you’d get from selling your current home wouldn’t be enough to clear your mortgage. But, if you’re planning on staying in your home for many years, this isn’t so much of an issue. There’s plenty of time for you to pay off more of your loan and for house prices to rise again.
Current low-deposit mortgage schemes
There are many schemes that help people, particularly first time buyers, who don’t have a large deposit. Some are specific to certain groups, or councils. Support includes:
Shared ownership is UK wide and allows you to buy part of a property and grow your ownership
First Homes (England) gives first time buyers a discount on the market value of a new-build home
Help to Buy equity loans (Wales) runs until September 2026. First time buyers can get a government loan to help buy a new-build home.
Low-cost Initiative for First Time Buyers (Scotland). First time buyers purchase part of a property, with the government buying the rest.
There’s more about the support available in our guide to government schemes for first time buyers.
The Mortgage Guarantee Scheme
In July 2025, the government launched a new version of a mortgage guarantee scheme, to encourage lenders to offer low-deposit mortgages. The scheme is behind-the-scenes - you don’t apply for it but it’s there to support mortgage lenders which take part.
Under the scheme, the government partially compensates lenders if they end up losing money (for example, if your home gets repossessed and the lender sells it for less than your mortgage value). This reduces the risk to the lender but doesn’t affect you - you still need to pay your mortgage as normal.
Deposit Unlock
Deposit Unlock allows you to buy a new-build home from a participating homebuilder using a 5% deposit and a mortgage from a lender that’s also participating in the scheme.
Lenders typically ask for a higher deposit - such as 15% or more - if you’re buying a new build because they tend to lose value over the first few years. But with Deposit Unlock, the housebuilder pays to insure the mortgage instead.
Family Boost and Guarantor Mortgages
Family Boost or family-backed mortgages allow a relative to help you get a mortgage by offering savings as security against the loan. Typically the amount needs to be 10% of the property’s purchase price.
Guarantor mortgages allow someone else to back your application by agreeing to step in and cover your mortgage payments if you don’t make them. Find out more in our guide.
How to find a low-deposit mortgage
Rates, costs and terms of low-deposit mortgages vary between lenders. It’s a good idea to get some help so you can navigate the market. Why not chat with one of our mortgage experts for free? We’re here to help you figure it out.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Habito by Monzo is a mortgage broker, not a lender. We’re authorised and regulated by the Financial Conduct Authority. This content is intended for general guidance and is not a substitute for personalised mortgage advice.
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Frequently asked questions
What is the easiest mortgage to qualify for?
If you have a deposit of 20% or more and a great credit history, you’ll usually find it easy to qualify for a range of good deals. But there were hundreds of 5% deposit deals available when we checked in spring 2026, including from high street lenders. Chatting with a broker such as Habito can help you find the deals you’re likely to qualify for.
Do first-time buyers get better mortgage rates?
The rate you get will depend on the size of your deposit, your credit history, the property you’re buying and many other factors. Lenders do offer specific deals for first time buyers, such as cashback, free valuations or legal fees paid.
Is a £30k or £40k salary enough to buy a house?
You can usually borrow up to 4.5 times your salary. So if that’s £30,000, then you might be able to borrow £135,000. If you’re buying with someone else, you’ll be combining your salaries, which boosts the amount you can borrow.
Should I wait until I have a bigger deposit?
You’ll need to weigh up the cost of paying rent vs paying a higher interest rate if you have a low-deposit mortgage. If you can wait until you’ve saved a 10% deposit, you’ll likely unlock some lower interest rate deals, meaning your monthly payments will be cheaper.
What are the hidden costs of buying a house?
There are lots of extra costs when you buy a house, from valuation fees, solicitors’ fees, surveys and moving costs, and the big one: stamp duty. We’ve explained the main fees in this guide.
