On this page
- 2 year fixed rate with a 5% deposit
- 5.7%
- a 5% deposit on the middle new build price
- £20,000
- a month on that home with a 95% mortgage
- £2,205
- the household income it needs
- £84,500
What a 5% deposit mortgage is
A 5% deposit mortgage is a mortgage for 95% of the price: you pay 5% yourself and borrow the rest. Lenders call it a 95% loan to value mortgage. It is the smallest deposit most mainstream lenders accept, and it is open to first-time buyers and home movers alike.
On the middle asking price of a new home for sale in England today, £399,995, a 5% deposit is £20,000 and the mortgage covers the other 95%. Our article on how much deposit you need gives the same sums for every region.
In July 2025 the government made its mortgage guarantee scheme permanent, to keep these mortgages available. It guarantees part of a participating lender's loss if a home bought with a mortgage of more than 90% and up to 95% of the price is repossessed and sold for less than is owed. It backs the lender, not the buyer: you apply to the lender in the usual way, and the lender decides whether to use it. Under the scheme's rules:
- the mortgage must be more than 90% and at most 95% of the price;
- at least one buyer must intend to live in the home;
- it must be a repayment mortgage, not interest only;
- the home cannot be bought through shared ownership or shared equity.
Our page on the mortgage guarantee scheme sets out each rule in the scheme's own words, with its date.
The rate on a 95% mortgage today
A lender takes more risk on a 95% mortgage, and charges for it. Every month the Bank of England publishes the average rate lenders quote for new fixed-rate mortgages at each loan to value. These are the rates for September 2026:
Source: Bank of England, quoted household interest rates (Bankstats G1.3), via HomePortfolio, read 12 November 2026.
Show the figures
| Loan to value | Deposit | 2 year fixed | 5 year fixed |
|---|---|---|---|
| 95% | 5% | 5.7% | 5.54% |
| 90% | 10% | 5.37% | 5.17% |
| 85% | 15% | 5.26% | |
| 75% | 25% | 5.13% | 4.98% |
| 60% | 40% | 5.01% | 4.84% |
With a 5% deposit, the quoted 2 year fixed rate is 5.7% and the 5 year fixed rate 5.54%. A 10% deposit brings the 2 year rate to 5.37%, and a 25% deposit to 5.13%. These are averages across lenders; the rate on a particular mortgage depends on the lender, the fee and your circumstances.
What it costs a month
The higher rate and the bigger loan together set the monthly payment. On the middle new build price in England, £399,995, a 2 year fixed rate at each deposit costs:
Source: Bank of England, quoted household interest rates (Bankstats G1.3), via HomePortfolio, read 12 November 2026. Price: NewHomeSearch listings: every new home for sale in England.
Show the figures
| Deposit | Loan | Rate | A month |
|---|---|---|---|
| 5% (£20,000) | £379,995 | 5.7% | £2,205 |
| 10% (£40,000) | £359,996 | 5.37% | £2,015 |
| 15% (£59,999) | £339,996 | 5.26% | £1,880 |
| 25% (£99,999) | £299,996 | 5.13% | £1,634 |
| 40% (£159,998) | £239,997 | 5.01% | £1,290 |
With a 5% deposit the payment is £2,205 a month, against £2,015 with a 10% deposit: the difference is the extra £20,000 borrowed, and the higher rate on all of it. Against a 25% deposit, a 95% mortgage costs £571 more each month.
The 95% rate since 2016
The 95% rate moves with the rest of the market, but further. Since January 2016 the Bank of England's quoted 2 year fixed rate at 95% loan to value has been as low as 2.58%, in July 2020, and as high as 6.93%, in August 2023. A year before the latest month it was 5.03%.
Source: Bank of England, quoted household interest rates (Bankstats G1.3), via HomePortfolio, read 12 November 2026.
Show the figures
| Month | 5% deposit | 10% deposit | 25% deposit | 40% deposit |
|---|---|---|---|---|
| January 2016 | 3.95% | 2.85% | 1.93% | 1.7% |
| April 2016 | 3.92% | 2.71% | 1.84% | 1.67% |
| July 2016 | 3.85% | 2.57% | 1.72% | 1.73% |
| October 2016 | 3.73% | 2.42% | 1.52% | 1.38% |
| January 2017 | 3.62% | 2.5% | 1.45% | 1.33% |
| April 2017 | 4.04% | 2.43% | 1.35% | 1.24% |
| July 2017 | 4.07% | 2.37% | 1.41% | 1.23% |
| October 2017 | 4.02% | 2.36% | 1.55% | 1.44% |
| January 2018 | 3.82% | 2.17% | 1.54% | 1.42% |
| April 2018 | 3.9% | 2.36% | 1.72% | 1.73% |
| July 2018 | 3.78% | 2.3% | 1.75% | 1.73% |
| October 2018 | 3.33% | 2.27% | 1.8% | 1.64% |
| January 2019 | 3.04% | 2.23% | 1.72% | 1.65% |
| April 2019 | 2.92% | 2.15% | 1.66% | 1.6% |
| July 2019 | 2.96% | 2.15% | 1.61% | 1.49% |
| October 2019 | 2.99% | 2.07% | 1.47% | 1.31% |
| January 2020 | 3.02% | 2.05% | 1.41% | 1.3% |
| April 2020 | 3.07% | 1.89% | 1.38% | 1.32% |
| July 2020 | 2.58% | 2.5% | 1.45% | 1.32% |
| October 2020 | 4.13% | 3.52% | 1.94% | 1.49% |
| January 2021 | 4.16% | 3.63% | 1.75% | 1.33% |
| April 2021 | 4.01% | 3.38% | 1.49% | 1.24% |
| July 2021 | 3.53% | 2.79% | 1.29% | 1.16% |
| October 2021 | 2.98% | 2.04% | 1.29% | 1.13% |
| January 2022 | 2.73% | 1.95% | 1.64% | 1.42% |
| April 2022 | 2.95% | 2.58% | 2.35% | 2.25% |
| July 2022 | 3.96% | 3.69% | 3.48% | 3.43% |
| October 2022 | 6.42% | 6.2% | 5.99% | 5.94% |
| January 2023 | 6.02% | 5.66% | 5.14% | 5.01% |
| April 2023 | 5.65% | 5.07% | 4.6% | 4.53% |
| July 2023 | 6.88% | 6.49% | 6.22% | 6.22% |
| October 2023 | 6.6% | 6.06% | 5.6% | 5.52% |
| January 2024 | 5.87% | 5.44% | 4.71% | 4.62% |
| April 2024 | 5.87% | 5.47% | 4.98% | 4.86% |
| July 2024 | 5.97% | 5.61% | 4.99% | 4.8% |
| October 2024 | 5.61% | 5.3% | 4.4% | 4.19% |
| January 2025 | 5.69% | 5.35% | 4.63% | 4.48% |
| April 2025 | 5.29% | 4.96% | 4.42% | 4.23% |
| July 2025 | 5.05% | 4.62% | 4.21% | 4.02% |
| October 2025 | 5% | 4.57% | 4.2% | 4.03% |
| January 2026 | 4.8% | 4.36% | 3.93% | 3.72% |
| April 2026 | 5.8% | 5.46% | 5.14% | 4.97% |
| July 2026 | 5.48% | 5.07% | 4.79% | 4.6% |
| September 2026 | 5.7% | 5.37% | 5.13% | 5.01% |
People also ask
Is a 5 deposit mortgage a good idea?
It lets you buy sooner with less saved, at a higher rate: in September 2026 the quoted 2 year fixed rate was 5.7% with a 5% deposit and 5.37% with 10%. On a typical new build that is £2,205 a month against £2,015. Whether it suits you depends on your plans, so weigh both.
Can I get a mortgage with only 5% deposit?
Yes. Lenders offer 95% mortgages to first-time buyers and movers, and the government’s mortgage guarantee scheme exists to keep them available. The lender checks your income, outgoings and credit history, and lends up to about 4.5 times income.
What a 5% deposit buys
Lenders limit how much you can borrow to a multiple of your income, usually about 4.5 times. So the deposit decides how soon you can buy, but your income decides how much you can borrow. With a 5% deposit the most you can pay is a little lower than with a 10% one, because the loan is a bigger share of the price:
Source: NewHomeSearch listings: every new home for sale in England, read 12 November 2026.
Show the figures
| Household income | 10% deposit: up to | Share | 5% deposit: up to | Share |
|---|---|---|---|---|
| £30,000 | £150,000 | 0.6% | £142,105 | 0.5% |
| £40,000 | £200,000 | 3% | £189,473 | 2% |
| £50,000 | £250,000 | 10.7% | £236,842 | 7.3% |
| £60,000 | £300,000 | 23.4% | £284,210 | 17.7% |
| £75,000 | £375,000 | 44% | £355,263 | 38.1% |
| £100,000 | £500,000 | 75% | £473,684 | 68.4% |
A household earning £50,000 can pay up to £250,000 with a 10% deposit, which is £25,000, reaching 10.7% of the new homes for sale in England. With a 5% deposit it can pay up to £236,842, with £11,843 down, reaching 7.3% of them.
To borrow 95% of the middle new build price, £399,995, at 4.5 times income takes a household income of about £84,500; with a 10% deposit about £80,000. On a £250,000 home the figures are £52,800 and £50,000. The mortgage affordability calculator works this out for your own income and deposit, on the homes for sale near you.
A 5% deposit on a new build
Lenders lend at 95% on new homes, but each sets its own criteria for them, so check the lender's limits for the home you want before you reserve. The comparison's 95% LTV mortgage rates list the 95% deals lenders publish today, showing only those that lend on new builds, and its first-time buyer page the deals offered to first-time buyers.
Builders often offer help that touches the deposit. 51.6% of the new homes for sale carry at least one stated offer: deposit contributions, paid stamp duty and mortgage contributions among them. A builder's contribution is not your own deposit. The builder declares every incentive to your lender on the UK Finance Disclosure Form, and some lenders take a cash incentive off the price before they work out how much they will lend. Ask the lender how it treats an offer before you count on it.
Two builder-backed schemes have aimed at small deposits on new homes. Deposit Unlock, run by the Home Builders Federation for 95% mortgages on new homes from participating builders, closed to new completions in April 2026. Own New Rate Reducer uses a builder incentive of 5% of the price to lower the mortgage rate for the initial period, on homes from participating builders, with the partner lenders' own criteria. The schemes page lists every scheme open today.
The costs on top of the deposit
The deposit is not the only cash you need. Stamp duty is paid from your own money on completion: on the middle new build price, £399,995, a first-time buyer in England pays £4,999 and a home mover £9,999. Legal fees, a survey, mortgage fees and moving costs come on top. The cash needed calculator adds them up on a real home, with the builder's offers.
Find the new homes your budget reaches
Type your income and deposit: the calculator works out what you could borrow and shows the new homes it reaches, with the cash you need on the day.
Check what you can affordHow we worked it out
The rates are the Bank of England's average quoted rates for new 2 and 5 year fixed-rate mortgages at each loan to value, month by month since January 2016, as published in its database and read through HomePortfolio. The middle price is the median of the stated prices of the new homes NewHomeSearch lists as for sale in England today, read each day from the builders' own websites and the listings portals.
Each monthly payment is a repayment mortgage over 30 years at the 2 year fixed rate, on the middle price less the deposit. What an income reaches is the income times 4.5, the loan-to-income limit lenders work to, plus the deposit, as a share of the priced new homes for sale; the income a price needs is the loan divided by 4.5. Stamp duty comes from the same engine as our calculators, at the rates in force today. The scheme rules are HM Treasury's, as published on GOV.UK. Every figure is worked out again each time the page is opened. It is information, not advice: we do not arrange mortgages or recommend lenders.
Frequently asked questions
How much is a 5% deposit on a new build?
On the middle asking price of a new home for sale in England, £399,995, a 5% deposit is £20,000. On a £250,000 home it is £12,500, and on a £300,000 home £15,000.
What income do I need for a 95% mortgage?
At 4.5 times income, about £52,800 for a £250,000 home and £63,400 for a £300,000 home. For the middle new build price, £399,995, it is about £84,500. Each lender sets its own limit.
Are 95% mortgages more expensive?
Yes. In September 2026 the Bank of England’s quoted 2 year fixed rate was 5.7% at 95% loan to value, 5.37% at 90% and 5.13% at 75%.
Can first-time buyers get a 5% deposit mortgage on a new build?
Yes. The mortgage guarantee scheme covers new and existing homes, for first-time buyers and movers. Each lender sets its own criteria for new homes, so check its limits for the home you want.
Does the mortgage guarantee scheme pay towards my deposit?
No. It is a guarantee given to lenders, which covers part of a lender’s loss if a home is repossessed and sold for less than is owed. You still pay the 5% deposit and the whole mortgage.
Can I use a 95% mortgage on shared ownership?
Not under the mortgage guarantee scheme, whose rules exclude shared ownership and shared equity. With shared ownership you buy a share of the home, usually with a deposit of 5% to 10% of that share.
Sources
- NewHomeSearch: the new homes for sale in Englandbuilders' websites and listings portals, via HomePortfolio
- HM Treasury: 2025 Mortgage Guarantee Schemegov.uk
- HM Treasury: 2025 Mortgage guarantee scheme rulesgov.uk
- Bank of England: Database, quoted household interest ratesbankofengland.co.uk
- UK Finance: Disclosure Form, frequently asked questionsukfinance.org.uk
- Home Builders Federation: Deposit Unlockhbf.co.uk
- Own New: questionsownnew.co.uk
Information only, not financial advice. NewHomeSearch is independent: it does not sell homes, arrange mortgages or take payment from builders. Read how we work out every figure.
From the guides:First time buyer mortgages: how much you can borrowLoan to value (LTV): what it means for your mortgage rateNew build mortgages: what is different and what to check