5% Deposit Mortgage
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5% Deposit Mortgage
Charlie talks to us about 5% deposits and the mortgage process.
Can I get a mortgage with a 5% deposit? Is this possible?
Absolutely. A number of lenders will allow you to have a 5% deposit – so you are definitely able to get a mortgage.
What type of property can you buy with a 5% deposit mortgage?
You can certainly buy a house. Some lenders may not allow you to purchase a flat with a 5% deposit, so it’s good to speak to a mortgage broker and use their knowledge to guide you to a lender who would be most suitable for you.
Who is eligible for a mortgage with a 5% deposit?
Most people would be eligible for a mortgage with a 5% deposit, but these are just for residential first-time buyers or home movers – not Buy to Let, for example. There will be standard checks to meet to be eligible for a 5% deposit mortgage.
What is the process to apply for a mortgage with a 5% deposit?
The process is exactly the same with a larger deposit. It involves gathering documents and submitting an application to a lender. The lender will assess the application and then decide whether to approve it.
What government mortgage schemes are available with a 5% deposit?
There is a scheme called the Mortgage Guarantee Scheme which runs until the 30th of June 2025.
There are several specific criteria – such as you can only have a deposit between 5% and 9%. The property must not be valued above £600,000 and the scheme can’t be used for new build properties.
[correct at the time of recording in February 2025].
Do all lenders offer 5% deposit mortgages?
No, not all lenders offer 5% deposit products, but there is a wide choice of lenders available with a range of fixed, tracker and variable options to choose from.
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Can I remortgage with a 5% deposit people would like to know?
You would be able to remortgage, but there may be a restriction in lenders. You’re likely to only be able to do a pound-for-pound remortgage, which basically means you wouldn’t be able to raise more capital.
You might also have to stick with your existing lender, depending on what remortgage products are available currently.
What credit score is needed for a 5% deposit mortgage?
Obtaining a mortgage with a 5% deposit will typically be subject to a credit check. Some lenders may want you to have a better score than if you had a 10% deposit. The credit scoring system may be a little bit more strict than if you had a larger deposit.
How can a mortgage broker help here? Is there anything else we need to know?
When purchasing with a 5% deposit, a mortgage broker can really help and add value to the process. Brokers are more familiar with the criteria required, and will give you the best chance of obtaining a 95% mortgage.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.