Deposit Unlock explained: everything first-time buyers need to know

Deposit Unlock has closed

Deposit Unlock closed to new completions in April 2026. Outstanding mortgage offers at the point of closure continued to be honoured, and existing borrowers remain supported. This guide explains how the scheme worked; it is not open for new purchases. See the official Deposit Unlock notice.

Deposit Unlock was a mortgage scheme designed to help first-time buyers in England and Wales buy with a smaller deposit than many lenders would normally require.

Rather than relying only on a larger deposit to reduce lender risk, the scheme was structured so that a lender could offer a higher loan-to-value (LTV) mortgage on eligible purchases. In practice, this could mean buying with a deposit closer to 5%, subject to lender criteria and the specific property.

Deposit Unlock was not a government equity loan. It was a mortgage-based arrangement linked to new-build homes from participating housebuilders.

Related guides to current low-deposit routes:

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Deposit Unlock Scheme

How Deposit Unlock worked

With a standard mortgage, the deposit you put down is one of the main factors that influences the LTV and the lender’s risk assessment.

Deposit Unlock changed the starting point by allowing eligible buyers to access a mortgage where the lender was comfortable offering a higher LTV than they might otherwise.

The scheme was tied to:

Specific lenders
New-build homes
Participating housebuilders

The mortgage indemnity mechanism

Deposit Unlock was a mortgage indemnity scheme. In simple terms, it helped reduce the lender’s risk when they offered a high-LTV mortgage on a new-build property.

When a lender views a property as higher risk, such as where it may be harder to sell for an amount equal to the outstanding mortgage balance in certain scenarios, they may use indemnity insurance.

Under Deposit Unlock, the housebuilder paid the indemnity insurance costs rather than the lender. This was intended to make it less risky for lenders to offer high-LTV mortgages on eligible new-build homes.

Change any value and the other figures will update automatically.

Try an example: £250,000 home with a £25,000 deposit → 90% LTV

Property value

£40,000 £5,000,000

Changing the property value keeps the mortgage amount and recalculates your deposit or equity and LTV.

Deposit or equity

£0 £200,000

Mortgage amount

£0 £200,000

Loan-to-value

95%

0% 100%

Your loan-to-value

95%

A £190,000 mortgage on a £200,000 property.

95%

95% mortgage 5% deposit or equity

Search mortgages with these figures

Starts with a residential purchase. You can change the mortgage type and purpose in the search.

No mortgage borrowing needed

With these figures, the property value is fully covered by your deposit or equity. No mortgage borrowing is required.

Small mortgage amount

Fewer lenders offer mortgages below £25,000, so your options may be limited. Product and legal fees can also have a greater impact on the overall cost of a smaller mortgage.

Low property value

Fewer lenders offer mortgages on properties valued below £50,000. Minimum property values vary by lender and property type.

Buying to let?

If this is a buy-to-let purchase, most lenders cap borrowing at 75–80% loan-to-value, with some specialist options reaching 85%. This cap applies to buy-to-let mortgages only — residential lending typically extends to 95%.

High-LTV residential mortgage

Residential mortgages above 95% LTV have limited availability and often require a specialist mortgage product or scheme. Talk to your mortgage adviser about your options.

No deposit or equity buffer

You have no deposit or equity buffer. A fall in the property's value could leave you owing more than it is worth. No-deposit residential mortgages have limited availability and specific eligibility requirements. Speak to your mortgage adviser.

Who Deposit Unlock was for

Deposit Unlock was aimed at borrowers who wanted to buy an eligible new-build property with a low deposit.

First-time buyers looking to get onto the housing ladder
Home movers who already owned a property and wanted to move up (subject to the scheme’s rules and the mortgage product available)

Pros and cons for first-time buyers

Potential advantages

Lower deposit requirement: it could help you buy sooner if you were deposit constrained.
More options within new build: participating developers could expand the range of properties you could consider.
Mortgage route rather than shared equity: it was structured as a mortgage product, not a government equity contribution.

Potential drawbacks to consider

Higher monthly repayments were possible: borrowing more could increase your repayment amount.
Rates could be less competitive than lower-LTV deals: the cost of borrowing could be higher.
Limited to eligible properties: it was restricted to new-build homes from participating builders.
Not every lender offered it: you needed to check what was available for your specific purchase.
New-build premiums may apply: many new-build homes include a new-build premium, which can mean the purchase price is higher than an older property in the same area. That can affect overall affordability and the value you’re paying.

Lenders, housebuilders and property eligibility

Which lenders participated?

Deposit Unlock products were offered through select mortgage lenders, and the range could change over time.

Lender availability and product details could change, so it was important to confirm what was offered for the specific property/development you were considering.

Which housebuilders participated?

Deposit Unlock was linked to new-build homes from participating housebuilders. This meant the scheme was not simply “available anywhere”. It depended on whether the developer and the specific development were part of the programme.

Deposit Unlock was described as a joint initiative involving the Home Builders Federation and Gallagher Re, with the aim of encouraging more lenders to offer low-deposit mortgages on new-build homes.

The participating list could evolve, so the most reliable approach was to check the scheme status for the development you were looking at.

What property types could you buy?

Deposit Unlock was aimed at new-build purchases. However, the key point for first-time buyers was not just the property type, but whether the specific home was eligible under the scheme through the relevant lender/developer combination.

When assessing a potential purchase, buyers needed to look for:

Whether the development was from a participating housebuilder
Whether the lender would accept the purchase under Deposit Unlock
Any property value or mortgage limit constraints that applied

Deposit Unlock vs other first-time buyer options

It’s easy to compare schemes by headline deposit numbers, but the structure matters.

Deposit Unlock vs Shared Ownership

Deposit Unlock: a mortgage-only route (no shared equity arrangement).
Shared Ownership: involves owning a share of the property and paying rent on the remainder.

Deposit Unlock vs shared equity schemes

Deposit Unlock: was not based on government equity contributions.
Shared equity options: involve an additional equity component that can reduce the amount you need to borrow.

The “best” available option depends on your deposit, affordability, and the type of property you want to buy, not just what reduces the upfront deposit. Read more about Shared Ownership, First Homes and 95% LTV mortgages.

The rates below illustrate general residential first-time buyer mortgages at 95% LTV, not Deposit Unlock products. Check each product’s new-build and other criteria before applying.

Lowest Rate 95% LTV First-Time Buyer Mortgages

View more 95% LTV First-Time Buyer offers

What buyers needed to check before choosing Deposit Unlock

For first-time buyers, the scheme could be helpful, but it was important to look beyond the deposit headline.

Consider:

Total monthly cost: repayments could be higher due to the larger loan.
The mortgage term and interest rate type: fixed periods, variable follow-ons, and how long you planned to stay in the home.
Affordability: lenders still assessed affordability based on income, outgoings, and credit profile.
Eligibility match: whether buyer status, the property, and the lender/developer combination all aligned.

How the application process worked

Deposit Unlock applications generally followed a familiar mortgage journey:

Confirm eligibility for the scheme through the relevant lender/developer route.
Provide standard mortgage information (income, expenditure, and supporting documentation).
Complete the lender’s credit and affordability checks.
Proceed with the mortgage offer process for the eligible property.

Because the scheme was tied to specific combinations, it was often sensible to confirm eligibility for the exact property before committing to costs.

Common questions first-time buyers ask

It was associated with new-build purchases from participating housebuilders. Eligibility was therefore linked to the development you were buying.

The scheme was structured around eligible purchases through participating lenders and housebuilders, so older properties were not usually the focus. Buyers needed to verify eligibility for the specific property.

Mortgage limits and product availability varied by lender and product. It was also described as applying to new-build properties within certain value bands. Scheme details and eligibility could change, so buyers needed to confirm the criteria for the specific property and mortgage product they were considering.

If you’re comparing options, Deposit Unlock is best viewed as a former deposit-lowering route within a specific set of lender and new-build parameters. Compare currently available low-deposit mortgages for their impact on long-term repayments.

Key takeaways

Deposit Unlock was available to first-time buyers and home movers, but closed to new completions in April 2026.
It offered lower deposit potential by using a higher-LTV mortgage, subject to eligibility.
It was limited to new-build properties from participating housebuilders.
Availability depended on participating lenders and the specific development.
Borrowing more relative to the property value could mean higher monthly costs than lower-LTV alternatives.