Mortgage Guarantee Scheme (95% LTV): questions answered

Mortgage Guarantee Scheme (95% LTV): questions answered

If you’re trying to buy with a 5% deposit, you may hear about 95% LTV mortgages and the Mortgage Guarantee Scheme. In simple terms, the scheme is intended to help lenders offer certain high LTV mortgages by reducing some of the risk lenders take on.

Below is a broker-style Q&A covering the points that most often come up when home movers and first-time buyers explore 95% options.

What is the Mortgage Guarantee Scheme?

The Mortgage Guarantee Scheme is a government-backed arrangement designed to provide protection to mortgage lenders when they offer certain high loan-to-value (LTV) mortgages.

In practical terms, it aims to support lending to borrowers with a 5% deposit (i.e., a 95% LTV mortgage).

It is not the same as equity-based government support programmes.

When are 95% mortgages available under the scheme?

The scheme has a defined scheme window (start and end dates), and lenders may also choose to launch products at different times within that window.

Even when the scheme is available, product availability can vary by:

• lender
• property type (for example, flats versus houses)
• the specific mortgage term and product features

Who can use a 95% mortgage under the scheme?

The scheme is intended for buying a main residence.

In most cases, that means it can support:

• home movers buying their next main home
• first-time buyers purchasing their first main home

It is generally not used for applications such as:

• second homes or holiday homes
• buy-to-let mortgages
• purchases where the property is held through a limited company (typically required to be in individual names)

What are the maximum purchase price and loan limits?

There is a maximum purchase price cap associated with the scheme, and the maximum mortgage amount is linked to that cap and the 95% LTV structure.

However, lenders may apply their own internal maximums, which can be lower than the scheme ceiling. Some lenders may also set different limits depending on property type.

Because of this, two borrowers with the same deposit and income can sometimes receive different outcomes depending on the property and the lender’s product rules.

What LTV range does the scheme cover?

The scheme is aimed at the high LTV bracket—commonly described as around 91% to 95% of the property’s purchase price.

So while many people focus on 95% specifically (5% deposit), the scheme framework can also include products at slightly lower LTVs within that high LTV range.

What property requirements apply?

Key points commonly include:

• the property must be in the UK
• the mortgage must be structured in line with the scheme’s requirements

Property type can matter in practice. Even where a property is eligible in principle, some lenders may restrict what they will accept at high LTV—particularly for certain flat types or construction categories.

Does it have to be a capital repayment mortgage?

For scheme-backed lending, the mortgage is generally required to be on a capital repayment basis.

That means the loan is repaid through regular payments that reduce the balance over time, rather than relying on an end-of-term repayment vehicle.

Is a fixed rate required?

Many scheme-backed products require (or strongly prefer) that the mortgage includes a fixed rate option.

However, the exact fixed-rate expectations can vary by product, so it’s important to check the specific mortgage terms you’re considering.

Can you use the scheme for new-build properties?

This is one of the most common questions.

In practice, new-build acceptance can be limited. Even when the scheme exists, lenders may choose not to offer 95% LTV products on certain new-build properties, or may require a higher deposit.

If you’re buying a new-build, it’s important to confirm whether the specific lender/product supports it at 95% LTV, or whether another route may be more suitable.

How much can you borrow with a 95% mortgage?

Borrowing limits under 95% LTV mortgages are governed by affordability.

While lenders may use income multiples as part of their assessment, the actual maximum depends on each lender’s affordability model, including how they treat:

• income types (salary versus bonus/overtime)
• self-employed income
• regular outgoings and credit commitments
• household costs

So even if you meet the deposit requirement, borrowing can vary significantly lender to lender.

What about self-employed borrowers?

Many lenders that offer 95% mortgages may accept self-employed applications, but the process can be more detailed.

Common practical considerations include:

• more documentation may be requested
• lenders may assess income differently (for example, how net profit is treated)
• some applications may involve additional review

Because self-employed affordability can be sensitive to how income is evidenced, getting the application presented in the way a lender expects can make a meaningful difference.

Are there restrictions on who can apply?

Most lenders will apply their own borrower requirements in addition to the scheme framework.

These can include factors such as:

• residency status
• right to reside in the UK
• individual circumstances that affect affordability and credit assessment

Why do rates and deals vary so much?

Even when products are marketed as “95% mortgages”, the best option isn’t always the one with the lowest headline figure.

Deal differences can reflect:

• the lender’s maximum loan and property-type limits
• the product term (for example, fixed duration)
• the lender’s approach to affordability
• whether the mortgage is available through intermediaries only

A broker-led comparison helps ensure you’re not only looking at pricing, but also at whether a product is suitable for your property and financial profile.

What to consider before you apply

A 95% LTV mortgage can be a strong route for buyers with a smaller deposit, but it’s worth planning for the practical details that can affect acceptance:

• whether your property type and value fit the lender’s maximums
• whether the scheme-backed product supports your specific purchase
• how your income will be assessed (especially if self-employed)
• the fixed-rate requirement and how it fits your plans

Summary

The Mortgage Guarantee Scheme supports eligible high LTV lending by helping lenders manage risk. For borrowers, the key is understanding that eligibility isn’t just about having a 5% deposit—lenders also apply their own product rules around property type, maximum loan amounts, repayment structure, fixed-rate features, and affordability.

If you’re considering a 95% mortgage, the most effective approach is to compare options that match your property and circumstances, rather than assuming every 95% deal will work for every buyer.