How to buy a house with 5% deposit?
For first-time buyers, the size of the deposit required to buy a property has often kept them from getting onto the housing ladder. For example, the usual 10% deposit on an average-priced home in England & Wales of £286,768 (Dec 2025) is £28,677 (Dec 2025) . With a 5% deposit, this is halved to £14,338 (Dec 2025) .
What percentage should a deposit be to buy a house?
The percentage can be anything between 0% and 10%. You would never pay more than a 10% exchange deposit. The Contract of Sale states:
2.2.1 Deposit: 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
Source: The Law Society - Standard Contract of Sale 5th Edition
Where a buyer pays less than 10%, if they fail to complete, they are still liable to pay the full 10% to the seller.
6.8.3 Notice to Complete: On receipt of a notice to complete:
- if the buyer paid no deposit, he is forthwith to pay a deposit of 10 per cent.
- if the buyer paid a deposit of less than 10 per cent, he is forthwith to pay a further deposit equal to the balance of that 10 per cent.
Source: The Law Society - Standard Contract of Sale 5th Edition
Government-backed protection for lenders
The government launched a mortgage guarantee scheme to help home buyers with lower deposits. The mortgage guarantee scheme is available with several high-street banks, including Lloyds, Santander, Barclays, HSBC and NatWest. The scheme was originally planned to end on 30th June 2025; however, this is now a permanent scheme as the "Freedom to Buy Scheme", 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, there are other avenues for securing a home with a 5% deposit. For example, if you're looking at new-build properties, private initiatives such as the New Build Boost scheme or the Deposit Unlock scheme can provide an alternative route to homeownership with a low upfront cost.
Key Details of the Freedom to Buy Scheme
As we are now in early 2026, the scheme remains a primary tool for those with a 5% deposit.
- Targetted at: First-time buyers and home movers across the UK.
- Property Value: Valid on homes worth up to £600,000.
- Mortgage Product: Repayment mortgages only (91–95% loan-to-value).
- Guarantee Period: The government guarantee lasts for 7 years from the start of the loan.
- Exclusions: Some mortgage lenders in 2026 won't offer this scheme for new-build properties.
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 use 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 a 15% interest-free equity loan with 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?
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Andrew Boast FMAAT is a qualified accountant, conveyancing specialist and author with over 25 years of experience in the UK property sector. Since beginning his career in 2000 within established SRA and CLC-regulated conveyancing solicitor firms, Andrew has overseen the legal journeys of more than 75,000 clients.
He is the author of the property guide 'How to Buy a House Without Killing Anyone' and a frequent contributor to mainstream UK media on legislative updates, property law, first-time buyer guides, conveyancing best practices, and stamp duty changes. Andrew specialises in resolving complex title issues, property conflict disputes, and property tax options, streamlining the enquiry process to reduce transaction times and maintaining a client-friendly focus.
Caragh Bailey is a Lead Property Content Specialist at SAM Conveyancing, having joined the firm in 2020. With a portfolio of over 150 technical conveyancing, house survey and mortgage guides, she has become a primary authority on the end-to-end sale and purchase process.
Caragh specialises in complex legal workflows, including Help to Buy redemptions, equity transfers, shared ownership structures, trust deeds for tax planning, and joint ownership disputes. Her expertise extends to leasehold reform and RICS home surveys, where she provides clear, factual guidance on independent legal advice for specialist mortgage products and intricate ownership structures.
