Mortgages for 90% and 95% LTV: low-deposit options

Mortgages for 90% and 95% LTV: low-deposit options

A 90% or 95% LTV mortgage can make buying possible when saving a larger deposit feels out of reach. Instead of putting down 10% (90% LTV), you may be able to put down 5% (95% LTV). That can reduce the upfront cash you need—while increasing the importance of affordability, fees, and the lender’s criteria.

This guide explains what 90% and 95% LTV mortgages are, the kinds of low-deposit routes that may be available, and the key considerations that can affect whether a deal is suitable.

What do 90% and 95% LTV mean?

LTV (Loan-to-Value) is the relationship between the mortgage amount and the property’s value.

• 90% LTV: you borrow 90% of the property value and put down 10% deposit.
• 95% LTV: you borrow 95% of the property value and put down 5% deposit.

Example

If a home is worth £200,000:

• 90% LTV: deposit £20,000, mortgage £180,000
• 95% LTV: deposit £10,000, mortgage £190,000

Low-deposit options: what “5% deposit” mortgages can look like

Low-deposit lending is not one single product. It’s a category of mortgages where the deposit is smaller, so lenders typically apply tighter affordability checks and more specific eligibility rules.

Depending on your circumstances, you may encounter:

95% LTV (5% deposit) mortgages

These are designed for borrowers who can raise a 5% deposit, but not 10%.

90% LTV mortgages

Often more widely available than 95% LTV, and may be a stepping stone for buyers who can stretch to a 10% deposit.

Lower-deposit routes (where available)

Some buyers may explore alternatives such as:

• gifted deposits or family support (where allowed by the lender)
• specialist schemes (where the purchase structure affects how the mortgage is assessed)
• certain renter-to-owner pathways (availability and criteria vary)

Not every option will suit every buyer, and lender rules can change. The practical difference is that the “best” low-deposit route depends heavily on your income, credit profile, property type, and the deposit source.

Can you buy with just a 5% deposit?

In many cases, 95% LTV mortgages can be available. However, the fact that a 5% deposit is possible does not mean it is always the right choice.

With higher LTV lending, lenders generally focus more closely on:

• affordability (how comfortably you can meet repayments)
• credit history
• the deposit source (and whether it can be evidenced)
• property valuation and condition
• fees and the overall cost of the mortgage

How do 90% and 95% mortgages compare?

While the exact pricing varies by lender and market conditions, the general trade-off is consistent:

• Higher LTV (95%) usually carries more risk for the lender, which can affect the mortgage terms available.
• Lower LTV (90%) often opens up a wider range of options and may be priced more competitively.

Interest rates and fees

A low deposit can come with a wider spread of outcomes. Some deals may have higher interest rates, while others may balance rate and fees differently.

When comparing options, it helps to look beyond the headline rate and consider:

• lender fees and product fees
• whether the mortgage is fixed, variable, or discounted
• the total cost over the period you expect to stay

The main pros and cons of 90%/95% LTV mortgages

Potential advantages

• Lower upfront deposit: less cash tied up at the start.
• More buyers can access home ownership: particularly first-time buyers and home movers with limited savings.
• Flexibility for deposit strategy: you may be able to keep some savings for costs like surveys, moving, and emergencies.

Potential disadvantages

• Higher monthly repayments may be required (because you borrow more).
• Fewer options may be available compared with lower LTV bands.
• Greater exposure if property values fall: high LTV mortgages can increase the risk of being in negative equity.
• Fees can matter more: some low-deposit products may include additional costs.

What lenders typically look at for low-deposit mortgages

Every lender has its own criteria, but for 90% and 95% LTV mortgages, the assessment often becomes more detailed.

Key areas commonly include:

• Affordability: income stability, existing commitments, and how repayments fit your budget.
• Credit profile: past borrowing behaviour and any recent issues.
• Deposit evidence: where the deposit came from and whether it is properly documented.
• Property factors: valuation, property type, and sometimes the condition or construction.
• Mortgage structure: term length, repayment type, and whether the deal is fixed or variable.

If you’re using gifted deposit or family support, lenders may require additional documentation and may apply specific rules about how the funds are treated.

When a low-deposit mortgage may be a sensible choice

A 90% or 95% LTV mortgage can make sense when:

• you can meet repayments comfortably based on your current income
• you have a clear plan for future costs (including potential rate changes after a fixed period)
• you understand the fee/rate trade-off and the total cost implications
• you’re buying a property you can realistically hold for long enough to build equity

When it may be worth reconsidering the deposit strategy

It may be worth exploring alternatives if:

• your budget is tight and repayments could become difficult if interest rates rise
• you have limited savings for upfront costs and emergencies
• your credit history is likely to restrict the options you can access
• the property you’re considering may be challenging to value or may not meet lender requirements

Even small changes—such as increasing the deposit slightly—can sometimes move you into a different LTV band and affect the range of products available.

Negative equity risk: what it means in practice

With high LTV mortgages, there is a possibility that if property values fall, the mortgage balance could be higher than the property’s value.

This doesn’t mean a negative equity position is guaranteed, but it is a risk worth understanding—especially if you might need to move or remortgage before you’ve built equity.

FAQs

How do interest rates compare between 90% and 95% mortgages?

In general, 95% LTV mortgages may be priced with more lender risk in mind, which can affect the range of deals and the cost. The exact outcome depends on lender pricing, your circumstances, and the product structure (including fees).

Is negative equity a risk with 90% or 95% LTV?

Yes. The higher the LTV, the greater the potential exposure if property values decline. Over time, equity can build as you repay the mortgage and if the property value rises.

What are the advantages of using a mortgage broker for low-deposit lending?

A broker can help you compare options across lenders and product types, taking into account the details that matter for 90% and 95% LTV decisions—such as affordability, credit factors, deposit source, and property considerations.

What is a 90% LTV mortgage?

A 90% LTV mortgage is one where you borrow 90% of the property value and put down a 10% deposit.

Who typically uses 95% LTV mortgages?

95% LTV mortgages are often used by borrowers who can only raise a 5% deposit, such as some first-time buyers and home movers with limited savings.

Is it worth saving more to get a lower LTV?

Often, yes. A larger deposit can improve your position by reducing the LTV and potentially increasing the range of mortgage options available. Whether it’s worth waiting depends on your personal timeline and how you plan to manage repayments.

Summary: choosing between 90% and 95% LTV

A 95% LTV mortgage can reduce the deposit you need, but it usually comes with tighter criteria and a greater need to focus on affordability and total costs. A 90% LTV mortgage may offer a broader set of options, depending on your circumstances.

For many home buyers, the most important step is making sure the mortgage you choose is sustainable—not just possible—based on your income, credit profile, the property, and the full cost of the deal.