What is the mortgage guarantee scheme?

Key takeaways

• The mortgage guarantee scheme, officially the 2025 Mortgage Guarantee Scheme helps you buy a home with just a 5% deposit by allowing you to borrow up to 95% of the property's value.
• The scheme was made permanent in July 2025 as the 2025 Mortgage Guarantee Scheme, so it's here to stay.
• You can borrow up to £570,000 on properties worth £600,000 or less, and you don't need to be a first-time buyer to use it.
• Major lenders, including Lloyds, Barclays, Halifax, Natwest, Santander, and HSBC, offer mortgages through the scheme. However, many lenders also offer their own 95% LTV mortgages now, which provide the same low-deposit solution.
• Alternatives include 100% mortgages like Skipton's Track Record Mortgage, shared ownership, and guarantor mortgages.

What is the mortgage guarantee scheme?

The mortgage guarantee scheme is a government initiative that encourages lenders to offer 95% Loan to Value (LTV) mortgages by giving them a partial state-backed guarantee. A version of the scheme first ran from 2013 to 2016 under the Help to Buy banner, before a second version launched in 2021. In July 2025, the government made it permanent as the 2025 Mortgage Guarantee Scheme, so buyers with as little as a 5% deposit can keep accessing low-deposit deals as part of their housing policy.

You might also like: How to buy a home with a small deposit

How does the mortgage guarantee scheme work?

The mortgage guarantee scheme works by providing participating lenders with a government-backed guarantee, insuring them against a portion of their potential losses. In simple terms, if you couldn't keep up with repayments, the government would cover part of the lender's losses, which reduces the risk for lenders and gives them confidence to offer mortgages at higher loan-to-value ratios.

This protection gives lenders confidence to offer mortgages with higher loan-to-value ratios, giving them the confidence to offer these types of mortgages.

The main advantage of the mortgage guarantee scheme for you as a buyer is that you could find it easier to get a mortgage with a small deposit, as you typically only need 5% of the property purchase price saved up to be eligible for the scheme.

Here's a quick look at what happens behind the scenes:

• Lenders pay a small fee to HM Treasury for every loan they place under the scheme.
• The guarantee only covers borrowing above 80% LTV, so the state’s exposure is limited.
• The total liability is capped at £3.2 billion, which the Treasury classes as "low risk".

Is the mortgage guarantee scheme still available?

Yes. The previous version of the scheme (which ran from 2021 to 2025) has now closed to new applications, but the government replaced it with the 2025 Mortgage Guarantee Scheme, which is permanently available from July 2025. So you can still access a 95% LTV mortgage through the scheme today.

It's also worth knowing that many lenders now offer 95% LTV mortgages independently, without needing to use the scheme at all, so there are more low-deposit options available today than there were when the scheme first launched.

Regardless of which route is taken, you still need to pass the lender's affordability checks to show you can comfortably keep up with repayments.

How much can you borrow through the mortgage guarantee scheme?

You can borrow up to £570,000 (that's 95% of the £600,000 property price cap) on the mortgage guarantee scheme, but some lenders may offer you a smaller loan based on their affordability criteria.

Typically, you can borrow up to 4.5x your household income for a mortgage, but you may be offered less based on your creditworthiness and other factors, such as being self-employed.

The good news is that some borrowers can access mortgages of 5-6x their income through specialist schemes - this is where our expertise really comes in, as we can help you explore these options.

Learn more: How big of a mortgage can I get?

Which lenders offer the mortgage guarantee scheme?

A number of mortgage lenders are willing to offer 95% mortgages through the mortgage guarantee scheme including:

• Lloyds. Lloyds also offers its own £5K Deposit Mortgage, which requires a flat £5,000 minimum deposit rather than a percentage of the purchase price.
• Barclays
• Halifax
• Bank of Scotland
• Natwest
• Santander
• HSBC
• Virgin Money

Many other lenders offer their own 95% LTV mortgages that aren't part of the mortgage guarantee scheme, but provide the same benefit: the ability to purchase a home with just a 5% deposit. See if you’re eligible today.

Learn more: Low deposit mortgage schemes for first-time buyers

Is the mortgage guarantee scheme only for first-time buyers?

No, you don't need to be a first-time buyer to use the mortgage guarantee scheme. The government confirms the scheme is open to both first-time buyers and home movers, so you can use it to buy a home with a small deposit even if you've bought a property before or inherited a relative's home.

There are other criteria to be aware of:

• Deposit - between 5% and 9% of the purchase price
• Property value - maximum of £600,000
• Property type - Existing properties only (no new builds).
• Mortgage type - Repayment mortgages only (no interest-only).
• Usage - Must be your primary residence (no buy-to-let).

What are the alternatives to the mortgage guarantee scheme?

You may be able to get a 95% mortgage even without the mortgage guarantee scheme. Since the scheme first launched back in 2013, many lenders have grown comfortable offering 95% LTV products on their own, so there are plenty of routes onto the ladder. In some cases, you can even borrow 100% of the property's value. If you can prove that you've paid your rent and household bills in full and on time for 12 months, you may be eligible for Skipton Building Society's Track Record Mortgage. If your application is approved, you'll be given a 100% mortgage, no deposit needed.

Another option is a shared ownership mortgage. Instead of buying a house with a deposit and mortgage, you'll buy a share of a home and pay rent on the rest. You'll need a much smaller deposit than you would with a traditional mortgage, and you won't need to borrow as much.

There are also some guarantor mortgage options, like a Savings as Security mortgage, which could help you get on the ladder with a helping hand from a family member.