What are 95% mortgages and can I get one?

Key takeaways

• A 95% mortgage lets you buy a home with just a 5% deposit, borrowing the remaining 95% from a lender
• These mortgages are available to both first-time buyers and home movers from major high-street lenders
• The Freedom to Buy scheme (launched in 2025) has made 95% mortgages more widely available by reducing lender risk
• Interest rates on 95% mortgages are typically higher (around 5.5%–6.0%) than lower LTV products
• You'll need to meet lender eligibility criteria and pass affordability and credit checks to qualify

What is a 95% mortgage?

A 95% mortgage, also called a 95% LTV mortgage (loan-to-value), is a mortgage loan equivalent to 95% of the full purchase price of a property. You'll need to put down at least 5% of the property price as a deposit, then borrow the rest of the money from your lender. Together the mortgage loan and your deposit will make up 100% of the final purchase price.

For example, if you wanted to buy a home worth £250,000 with a 95% mortgage, you'd need a deposit of £12,500 (5%) and would borrow the remaining £237,500 from your lender.

Here's what a 5% deposit looks like at different property prices:

Are 95% mortgages available?

Yes, there are several mortgage lenders who offer 95% mortgages, both for their standard mortgage products and schemes designed specifically for first-time buyers or other groups like doctors, nurses or teachers. Whether you qualify for a 95% mortgage depends on if you meet a lender's eligibility criteria, as well as passing their affordability and credit score checks.

Availability has also been boosted by the government's Freedom to Buy scheme, which replaced the Mortgage Guarantee scheme in June 2025. The scheme acts as a safety net for lenders by partially covering their losses if a borrower can't keep up with repayments. This reduces risk for lenders and encourages more of them to offer 95% mortgage products, making it easier for first-time buyers and home movers to get on or move up the property ladder with just a 5% deposit.

You might like: Best mortgages for first-time buyers

What is the Freedom to Buy scheme?

Freedom to Buy is a government-backed scheme launched in 2025, replacing the Mortgage Guarantee Scheme which ended in June 2025. It is designed to help buyers with smaller deposits get on the property ladder by encouraging more lenders to offer 95% mortgages.

Here's how it works: the government acts as a partial safety net for lenders. If a borrower defaults and the lender doesn't recover the full loan amount when selling the property, the government covers some of that shortfall. This reduces the risk for lenders and gives them more confidence to approve applications with just a 5% deposit.

To use Freedom to Buy, the mortgage must meet certain conditions:

• The property must be worth £600,000 or less
• It must be the buyer's main home not a buy-to-let property
• The deposit must be between 5% and 9%
• The mortgage must be a repayment mortgage, not interest-only

The scheme is open to both first-time buyers and home movers. It doesn't reduce monthly mortgage payments or provide financial help directly, the buyer is still fully responsible for repaying the loan.

Who offers 95% mortgages?

There are a range of providers who offer 95% mortgages, including familiar high-street lenders such as:

• Lloyds
• Barclays
• HSBC
• Santander
• Nationwide
• Natwest
• Leeds Building Society
• Skipton Building Society

Are 95% mortgages only for first-time buyers?

No, 95% mortgages are available to both first-time buyers and home movers, although there are some specialist mortgages designed specifically for first-time buyers with small house deposits.

Find out more: How to buy a home with a small deposit

Can you get a 95% mortgage?

You might be eligible for a 95% mortgage, but whether you'll be accepted by a lender depends on your eligibility for their specific mortgage products, and whether you pass their affordability and credit checks.

While every lender is different, many 95% mortgage products will require:

• The property to be valued at no more than £600,000
• A deposit of between 5% and 9% of the property price
• A repayment mortgage (not interest-only)
• The property to be your main residence (not a buy-to-let)

You may also find it harder to qualify if you have adverse credit, are self-employed, or are purchasing a new build property, as some lenders will ask for a deposit of more than 5% in these cases.

Can I get a 95% mortgage with bad credit?

It may be possible to get a 95% mortgage with bad credit, but it's worth knowing that lenders tend to set stricter criteria for these products. Because you're borrowing a higher proportion of the property's value, you're seen as a higher risk to lenders. As a result, many lenders will only approve applicants with a strong credit history to offset that risk.

If your credit history isn't where you'd like it to be, you may need to focus on improving your credit score before applying. Alternatively, you may be able to widen your options by adding another borrower or guarantor to your mortgage, something Tembo specialises in, alongside a range of other schemes designed to help you boost your budget and find a path forward even with a lower credit score.

Can you get a 95% mortgage on a new build?

You can sometimes get a 95% mortgage on a new build property. In fact, many home developers run specialist schemes like Deposit Unlock, which allows you to purchase one of their new build properties with just a 5% deposit. This is to encourage first-time buyers and those looking for a brand new home to purchase without spending years saving.

That said, some lenders are more cautious when it comes to new builds. This is because newly built properties don't always hold their value in the short term, which increases the lender's risk if they ever need to repossess and sell the property. Because of this, some new build properties may require a larger deposit of 10% or more.

Is a 95% mortgage a good idea?

For first-time buyers who are struggling to save up a big enough house deposit, a 95% mortgage can be a good idea to get on the ladder sooner. By purchasing a home with a small deposit, you can start building up your own property wealth instead of spending money on rent.

However, there are some trade-offs worth knowing about:

• Higher interest rates: 95% mortgages will often come with higher mortgage interest rates than products at lower LTVs. For example, as of early 2026, average two-year fixed rates for 95% LTV mortgages were approximately 5.5%–6.0%, compared to around 4.3%–4.7% for 60% LTV products, according to Moneyfacts. This means monthly repayments will be more expensive because more interest is paid each month. Even stretching a deposit from 5% to 10% can unlock noticeably cheaper deals, so it's worth considering if a buyer is able to save a little more.
• Negative equity risk: It's also worth being aware that, because the borrower owns a smaller share of the property, there's more exposure to negative equity if property values were to fall, so it's something to factor into the decision-making.
• Standard variable rate (SVR): When the initial fixed rate period ends, the lender will typically move the borrower onto their SVR, which is usually more expensive and can go up or down. It's a good idea to start looking at remortgage options before the deal ends to avoid paying more than necessary.

What interest rates do 95% mortgages have?

Because lenders take on more risk when lending 95% of a property's value, 95% mortgages typically carry higher interest rates than deals with a lower LTV. As of 2025, two-year fixed rates on 95% LTV mortgages are broadly available in the 5–6% range from high-street lenders, though the exact rate will depend on the lender, the property, and the borrower's individual circumstances.

Under the Freedom to Buy scheme, lenders are required to offer at least one five-year fixed-rate option. With a fixed-rate mortgage, the interest rate stays the same for the length of the fix, which means monthly payments stay predictable.

When the fixed period ends, the borrower is moved onto the lender's standard variable rate (SVR). SVRs are usually higher and can go up or down, so it's a good idea to start comparing new deals before the current one expires.

It's also worth knowing that increasing the deposit, even by a small amount, can make a meaningful difference. Moving from a 5% deposit to a 10% deposit can unlock lower rates and reduce monthly repayments over the life of the mortgage.