Can I Still Get a Mortgage with a Small Deposit in 2025?

Getting a Mortgage with a 5% Deposit in 2025:
What Are Your Options?

With property prices still high and the cost of living putting pressure on savings, one of the most common questions in 2025 remains:

“Can I still get a mortgage with just a 5% deposit?”

The good news? Yes, small deposit mortgages are still available - but the market has changed. Lenders are more selective, affordability checks are stricter, and the range of options depends on your income, credit profile, and property type.

In this article, we break down the current landscape for low deposit mortgages, the key schemes and lenders offering support, and how you can boost your chances of approval.

What Is a Small Deposit Mortgage?

A “small deposit mortgage” typically refers to products where you’re borrowing up to 95% of the property’s value - known as a 95% loan-to-value (LTV) mortgage. That means if you’re buying a £300,000 property, you’d only need to put down £15,000 as your deposit.

These products are popular among:

• First-time buyers with limited savings
• Single-income households
• Renters trying to escape the rental trap

Are 95% Mortgages Still Available in 2025?

Yes - though they’re not as widespread as they once were, 95% LTV mortgages remain on the market.

Many high-street lenders continue to offer them, especially under government-backed schemes. However, the availability depends heavily on:

• Your credit score
• Your employment type and income stability
• The property type (e.g. new-build flats may be excluded)

Lenders have become more cautious in 2025 due to ongoing inflationary pressures and stricter FCA regulations under Consumer Duty. That means applicants need to be financially watertight to secure approval at higher LTVs.

Government Schemes That Can Help in 2025

Several government initiatives remain in place to support small-deposit buyers:

Mortgage Guarantee Scheme (extended into 2025)
Allows lenders to offer 95% mortgages with a government-backed guarantee, reducing their risk.

First Homes Scheme
Eligible first-time buyers can purchase new-build homes at a 30–50% discount, requiring a smaller deposit relative to market value.

Shared Ownership
Buy a share of a property (e.g. 25–75%) and pay rent on the rest, significantly lowering the upfront deposit needed.

Lifetime ISA
Save up to £4,000/year and receive a 25% government bonus. Can be used towards your first home deposit.

What Income Do I Need for a 5% Deposit Mortgage?

Most lenders will allow you to borrow 4 to 4.5 times your annual income, depending on your financial profile. Some may stretch to 5 times income for high earners with minimal debt.

Example:
If you earn £40,000 a year, you could borrow up to £180,000. With a 5% deposit, that gives you a total property budget of around £189,000.

Tips to Improve Your Chances of Approval

If you’re working with a small deposit, preparation is everything. Here’s how to boost your chances in 2025:

• Check and improve your credit score
  Pay down debts, ensure you're on the electoral roll, and avoid missed payments.
• Reduce existing financial commitments
  Lenders will look closely at loans, car finance, credit cards, and childcare costs.
• Get a Mortgage in Principle (MIP)
  Strengthens your position when house-hunting and shows sellers you're a serious buyer.
• Use a mortgage broker
  They have access to specialist lenders and schemes not available directly to consumers.

What About Interest Rates?

One of the trade-offs with small deposit mortgages is a higher interest rate. In 2025, 95% LTV products often come with rates 0.5–1% higher than equivalent 75% LTV deals.

That’s why it’s often worth aiming for a 10% deposit, if possible, to access better rates and broader lender choice.

Are New-Builds or Flats Eligible?

Some lenders are more cautious about offering 95% mortgages on:

• New-build flats
• Non-standard constructions
• Leaseholds with short terms remaining

Be sure to check with a broker before making an offer on these property types.

Final Thoughts

Getting a mortgage with a 5% deposit in 2025 is still possible—but it requires careful planning, clean finances, and the right lender. The more prepared you are, the greater your chances of securing a competitive deal and getting onto the property ladder sooner.

Ready to Explore Your Options?

We specialise in helping first-time buyers and low-deposit borrowers secure the right mortgage, even in a shifting market.

Book a consultation with our experienced advisors today.