How to buy a house with 5% deposit?
What percentage should a deposit be to buy a house?
The contract of sale states: "The buyer is to pay or send a deposit of 10 per cent of the purchase price no later than the date of the contract" . However, you can agree to a 5% deposit on the exchange of contracts if you are getting a 95% mortgage.
The government launched a mortgage guarantee scheme to support home buyers with a lower deposit. The mortgage guarantee scheme is available with several high-street banks, including Lloyds, Santander, Barclays, HSBC and NatWest. The scheme is planned to run until 30 June 2025, though it can be closed sooner than this.
The guarantee protects the bank, not the borrower, if the borrower doesn't repay the mortgage in full to the lender on voluntary sale or repossession. Where there is a shortfall, the government reimburses the mortgage lender.
Beyond this government scheme, it's important to note that other avenues exist for securing a home with a 5% deposit. For example, if you're looking at new build properties, private initiatives like the New Build Boost scheme can provide an alternative route to homeownership with a low upfront cost.
Are you eligible for a 95% mortgage?
This mortgage guarantee scheme is available to first-time buyers or home movers, and the specific eligibility criteria are:
- purchase price of no more than £600,000
- not a new build property
- loan-to-value (LTV) of between 91% and 95%
- deposit between 5-9%
- residential mortgage (not a buy-to-let mortgage)
- repayment mortgage (not an interest-only)
For first-home buyers, the 5% deposit mortgage guarantee scheme makes home-buying more affordable.
How much deposit do I need for a house worth £300,000?
You can buy a £300,000 property using a 5% deposit of £15,000; however, some sellers will ask you to pay a 10% deposit of £30,000.
You might be tempted to ask the estate agent before you offer if the seller will accept a 5% deposit, which may make the seller nervous about selling to you. It is best to leave it until your offer is accepted and you have your mortgage offer. The seller is more likely not to be bothered once they know you can afford the property with a mortgage.
Read more - How to make an offer on a house.
Buying with a 5% deposit calculator
Find out the deposit amount and how many years it'll take to save for a 5% house deposit.
Use our FREE online mortgage calculator to see how much your monthly mortgage repayment will be on a 95% mortgage.
How to apply for a 5% deposit mortgage?
You can apply directly with the bank using their online application form or a mortgage broker to help. The benefit of a mortgage broker is that they'll complete the mortgage application for you. You can apply using our panel mortgage broker here.
Here are some links to apply directly online:
- Natwest Bank Plc
- Barclays Bank Plc
- HSBC Bank Plc
- Co-Operative Bank Plc
- Yorkshire Building Society
- Nationwide Building Society
- Royal Bank of Scotland
- Lloyds Bank Plc
5% deposit options for new build properties
It's important to distinguish between the government's Mortgage Guarantee Scheme (primarily for existing homes) and schemes designed specifically for new builds that also allow for a 5% deposit.
One private initiative is the New Build Boost scheme, offered by Generation Home in partnership with major housebuilders like Persimmon and Charles Church.
This scheme enables you to buy a new build home with a 5% deposit by combining it with a 15% interest-free equity loan and an 80% Generation Home mortgage. This offers a distinct pathway to new build homeownership with a low upfront cost.
To apply for the New Build Boost, you would typically engage directly with Generation Home or one of their approved mortgage brokers and purchase an eligible property from a participating developer.
What are the Pros and Cons of a 5% house deposit?
Pros | Cons |
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Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.

Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.