Low Deposit Mortgages: The Complete Guide

If you’re saving to buy your first home, you’ve probably got a figure in your head for how much deposit you need but may wonder what low deposit mortgages exisit? For years, the standard advice has been to aim for 10%, or at the very least 5%, before you can seriously start thinking about buying. The problem is that when you’re paying rent, bills and everything else that comes with day-to-day life, saving £20,000, £30,000 or more isn’t exactly easy.

The good news is that the mortgage market has changed quite a bit. A 5% deposit is no longer the lowest you can potentially go, with lenders now offering mortgages based around 2% deposits, fixed £5,000 or £10,000 deposits and, in some circumstances, no traditional deposit at all. In our 13+ years of giving mortgage advice there has never been as many low deposit mortgages as there are now.

That doesn’t mean everyone should automatically go for the mortgage requiring the smallest deposit. Borrowing at a higher Loan to Value (LTV) can mean higher rates, fewer options and less equity in your home from day one. But if the deposit is the main thing stopping you from buying, it’s worth knowing what your options actually are before deciding you’re another two or three years away.

What is a low deposit mortgage?

Your deposit is the amount of the purchase price you’re putting into the property yourself, with the mortgage covering the rest. The percentage you’re borrowing compared with the value of the property is known as the Loan to Value (LTV).

If you were buying a £250,000 property with a 10% deposit, you’d put down £25,000 and borrow £225,000, giving you a 90% LTV mortgage. With a 5% deposit, you’d put down £12,500 and borrow £237,500 at 95% LTV. At 2%, your deposit would be just £5,000 and you’d need a £245,000 mortgage at 98% LTV.

Generally speaking, the bigger your deposit and the lower your LTV, the more mortgage options you’re likely to have available. You may also be able to access a lower interest rate because the lender is taking less risk. That’s still true today, but what has changed is the assumption that you have to reach 5% or 10% before buying becomes a realistic option.

Low deposit mortgage options available right now

Last updated: August 2026
This is probably the part most people reading this guide will be interested in: what can you actually get right now with a small deposit?

There are now quite a few different answers to that question. Some lenders still work on the traditional percentage-based deposit, while others have introduced fixed minimum deposits of £5,000 or £10,000. We’ve also got products that take your history of paying rent into account, mortgages that use family support and a handful of options that can potentially go all the way to 100% LTV.

This is also one of the fastest-moving areas of the mortgage market. Products are launched, changed and withdrawn regularly, so this isn’t intended to be an exhaustive list or a recommendation of any particular lender. It’s a snapshot of what’s available at the time of writing and, more importantly, an example of how much the market has changed.

Leeds Building Society – 2% or £5,000 deposit

Leeds Building Society’s Start Mortgage allows eligible first-time buyers to purchase with a deposit of just 2% of the purchase price or £5,000, whichever is greater. It goes up to 98% LTV, with a maximum mortgage of £500,000 and a minimum household income of £30,000. Borrowing can potentially reach five times household income, subject to affordability, and Leeds can also consider gifted deposits and self-employed applicants.

To put that into perspective, someone buying a £250,000 property would need a £25,000 deposit to put down 10%, or £12,500 to put down 5%. At 2%, that deposit drops to just £5,000. That’s potentially £20,000 less to save compared with waiting until you’ve reached 10%.

That doesn’t automatically mean buying with 2% is better than putting down 5% or 10%. You’ll be borrowing more and the interest rate available may be higher, but for someone who can comfortably afford the mortgage and is struggling to build a bigger deposit while paying rent, it’s a very different proposition.

Aldermore – 2% deposit

Aldermore is another lender to recently enter the 2% deposit market, offering mortgages up to 98% LTV. What makes Aldermore particularly interesting is that it’s a specialist lender, so it may be able to help in situations where the deposit isn’t the only part of the application that isn’t completely straightforward.

For example, Aldermore can consider self-employed applicants, more complex income, gifted deposits, limited credit history and certain historic credit issues. For eligible borrowers, it can also potentially lend at higher income multiples, depending on income, LTV and the wider application.

That means someone with a 2% deposit who doesn’t quite fit the typical high-street mould isn’t necessarily out of options. As always, affordability and the wider lending criteria still need to work, but it’s another sign of how much choice is starting to appear above the traditional 95% LTV ceiling.

Cambridge Building Society – 2% deposit

The Cambridge Building Society also offers a mortgage up to 98% LTV through its First Step Mortgage, meaning eligible first-time buyers could potentially purchase with a deposit of just 2%.
One useful feature is that gifted deposits can potentially be accepted, so the deposit doesn’t necessarily all need to come from the buyer’s own savings. It’s also a good reminder that it’s worth looking beyond the major high-street banks, particularly when buying with a small deposit, as some of the smaller building societies are doing some of the more interesting things in this part of the market.

Halifax – £5,000 deposit

Halifax has joined the low-deposit market with an option allowing eligible first-time buyers to purchase with a minimum deposit of just £5,000. Depending on the purchase price, this can mean borrowing at around 98% LTV.

Products like this are interesting because they move away from the traditional idea that your deposit always has to be a fixed percentage of the property price. On a £300,000 property, for example, a normal 5% deposit would be £15,000. If you’re eligible for a product requiring £5,000 instead, that’s a £10,000 difference in the amount you need to find upfront.

Halifax also offers its Family Boost Mortgage, which takes a different approach again. Rather than the buyer necessarily providing the full traditional deposit, family savings can be used as security for the mortgage. It won’t be suitable for everyone, but it shows how many different ways lenders are now trying to tackle the deposit problem.

Accord Mortgages – £5,000 deposit

Accord Mortgages has its own £5k Deposit Mortgage, allowing eligible first-time buyers to potentially purchase with a £5,000 deposit and borrow up to around 99% LTV, depending on the purchase price.

Again, it’s easiest to see the appeal when you look at the actual numbers. On a £300,000 purchase, a traditional 5% deposit would be £15,000, whereas £5,000 is obviously a very different savings target. There are restrictions around property values, property types and eligibility, as you’d expect when borrowing at this level, but for the right buyer it could significantly reduce the amount of time needed to save.

Yorkshire Building Society – £5,000 deposit

Yorkshire Building Society also offers a £5,000 deposit option for eligible first-time buyers, with borrowing potentially reaching 99% LTV, depending on the purchase price and the lender’s criteria.

This is really where the direction of travel in the market becomes obvious. Lenders are increasingly recognising that there are buyers who can comfortably afford a mortgage payment but find it difficult to build a £15,000, £20,000 or £30,000 deposit at the same time as paying rent. A smaller deposit doesn’t solve the affordability side of the equation, but it can remove one of the biggest barriers to getting started.

Santander – £10,000 deposit / up to 98% LTV

Santander’s My First Mortgage allows eligible first-time buyers to potentially borrow up to 98% LTV, with a minimum cash deposit of £10,000.

This is a useful example of why you can’t always look at the headline LTV and assume that’s exactly how the deposit will work. A mortgage available at 98% LTV doesn’t necessarily mean you can simply put down exactly 2% on any property you choose. Lenders can also have minimum cash deposits, maximum purchase prices, maximum mortgage amounts and other restrictions, so the full criteria always matters.

Newcastle Building Society – £5,000 deposit

Newcastle Building Society’s First Step Mortgage allows eligible first-time buyers to purchase with a minimum £5,000 deposit.

For example, on a £210,000 property, a £5,000 deposit would mean borrowing £205,000 at around 97.62% LTV, compared with needing £10,500 for a traditional 5% deposit.
The product is available on properties between £101,000 and £350,000 and is offered on a five-year fixed rate basis.

There are some restrictions though, including no gifted deposits, no new-build properties and no affordable home ownership schemes such as Shared Ownership.

Skipton Building Society – potentially no deposit

Skipton’s Track Record Mortgage takes a completely different approach and is probably one of the better-known alternatives to saving a traditional deposit. It’s aimed particularly at renters and can use your history of making rental payments when assessing the mortgage, with eligible borrowers potentially able to borrow up to 100% LTV.

The thinking behind it is fairly easy to understand. Someone might have been paying £1,200 a month in rent for several years without missing a payment but still struggle to save a £15,000 or £20,000 deposit because a large chunk of their income is disappearing on rent every month.

That doesn’t mean paying £1,200 in rent automatically qualifies you for a particular mortgage amount. Skipton still carries out affordability checks and applies its wider lending criteria, and the amount available can be influenced by your previous rental payments. But it does offer a completely different route for some renters who would otherwise be stuck saving for several more years.

April Mortgages – 100% mortgage

April Mortgages is another lender offering a 100% LTV mortgage, meaning eligible borrowers could potentially purchase without putting down a traditional deposit.

Its mortgages work differently from the two and five-year fixed deals most UK borrowers are used to, with longer fixed-rate periods available. The rate can also reduce as the mortgage balance comes down and the borrower moves into lower LTV bands.

As with every 100% mortgage, the fact that you can potentially borrow the full purchase price doesn’t mean it’s automatically the best option. You’re starting with very little equity in the property and borrowing more than you would with a conventional deposit, but for the right circumstances it’s another route onto the housing ladder that simply wasn’t widely available a few years ago.

Metro Bank – up to 100% with JBSP

Metro Bank provides another potential route to 100% LTV, this time using a Joint Borrower Sole Proprietor (JBSP) structure. A JBSP mortgage allows another person, often a parent, to join you on the mortgage and have their income included within the affordability assessment without necessarily becoming a legal owner of the property.

This can be particularly useful because many first-time buyers aren’t dealing with just one problem. They might be struggling to build the deposit they need, while their income also doesn’t quite support the mortgage required for the property they want to buy.

A JBSP arrangement can potentially help with the affordability side, while Metro’s higher-LTV lending can help with the deposit side. There are obviously implications for everyone joining the mortgage, so it’s not something to enter into purely to boost the numbers, but it can be a useful option for the right family.

Gable Mortgages – 100% LTV

Gable Mortgages is another lender operating within the 100% LTV market, with options that can allow eligible first-time buyers and certain key workers to purchase without providing a traditional deposit.

As with the other no-deposit options, 100% LTV doesn’t mean there are no checks or that anyone can simply borrow the full value of any property. Income, affordability, credit history and the property itself still matter, but it adds another potential route for buyers whose biggest obstacle is saving the deposit.

Melton Building Society

Melton Building Society is another name worth knowing if you’re looking at low-deposit mortgages. It offers specialist first-time buyer options which can support can help someone onto the property ladder without having to rely solely on building a large deposit themselves.

What about the other lenders?

The lenders above aren’t the entire market. There are other options worth exploring depending on your circumstances, including Barclays, which offers its Family Springboard Mortgage, and Family Building Society, which specialises in family-assisted solutions that can use family savings or property wealth to help someone buy.

Then there’s the much wider 95% LTV market. Once you’ve got a 5% deposit, the number of potential lenders and mortgage products available increases considerably, so the products above are really about what might be possible when getting to that 5% figure is proving difficult.

How much has the low deposit mortgage market changed?

Quite a lot.

A few years ago, if you came to me without a 5% deposit, there probably wouldn’t have been a huge amount for us to talk about. Today, we’re discussing 2% deposits, fixed £5,000 and £10,000 deposits, 98% and 99% mortgages, 100% mortgages, products that consider your rental track record, family-assisted mortgages and JBSP arrangements.

It doesn’t mean getting a mortgage has suddenly become easy, and it certainly doesn’t mean everyone with £5,000 in the bank can now go and buy a £300,000 house. You still need to be able to afford the borrowing and meet the lender’s criteria, but there are considerably more ways of tackling the deposit problem than there used to be.

It’s also why I’d be careful relying on something you read about first-time buyer mortgages two or three years ago. This part of the market is evolving quickly, and I’d expect more lenders to enter the space and existing products to continue changing. If you’re reading this guide sometime after it was published, check what’s available at that point rather than assuming the options above are still exactly the same.

If you want to find out more about the growing list of options we’d always recommended getting personalised advice from a mortgage adviser. Our team at Dimora Mortgages are always on hand to held.

Is the mortgage with the smallest deposit automatically the best?

No, and this is probably the most important thing to take away from the lender list above.

If one lender will give you a 100% mortgage but the interest rate is considerably higher, while another requires a 5% deposit and offers you a much better overall deal, it doesn’t automatically make sense to borrow 100% just because you can. Equally, if saving that extra 5% is going to take another three years, the decision becomes much less straightforward.

Different lenders also calculate affordability differently. One lender might offer 100% LTV but not lend you enough based on your income, while another could require £5,000 upfront but allow you to borrow more. One lender might accept a gifted deposit, another might be better for the self-employed, while another could allow you to use a parent’s income through a JBSP arrangement.

There are a lot of moving parts, which is why the aim shouldn’t simply be to find the mortgage requiring the smallest possible deposit. The aim is to find the mortgage that makes the most sense for your circumstances as a whole.

Deposit and affordability are two completely different things

This is something that catches first-time buyers out all the time. Finding a mortgage with a £5,000 deposit requirement doesn’t automatically mean you can buy the property you want.
Let’s say you’re buying a £300,000 property and you’ve found a mortgage that only requires a £5,000 deposit. You’ve solved the deposit problem, but you still potentially need to qualify for a mortgage of £295,000.

The lender is still going to look at your income, loans, credit cards, car finance, childcare and other committed expenditure when deciding how much you can borrow. Your employment, age, mortgage term, credit history and the property you’re buying can all affect the application as well.

That’s why deposit and affordability always need to be looked at together. There’s not much benefit in finding a £5,000 deposit mortgage if you’re £80,000 short on affordability. Equally, you might have more than enough borrowing capacity but have convinced yourself you can’t buy because you haven’t saved the 10% deposit you thought you needed.

Is a bigger deposit still better?

In many cases, yes. Just because you can buy with a £5,000 deposit doesn’t necessarily mean you should.

Generally, a bigger deposit means a lower LTV, and that can potentially give you access to more mortgage products, lower interest rates and lower monthly repayments. You’ll also have more equity in the property from day one, which gives you a bigger buffer if house prices fall.

On a £250,000 purchase, a 2% deposit is £5,000, a 5% deposit is £12,500 and a 10% deposit is £25,000. If you’ve already got £25,000 sitting in the bank, putting down £5,000 just because a lender allows you to isn’t automatically the smartest thing to do.

But the opposite is also true. If you’ve got £12,500 today and somebody tells you to spend another three years getting to £25,000 before you even consider buying, that isn’t automatically good advice either. You need to look at what you can buy now, what the mortgage would cost, how much rent you’ll pay while continuing to save and what you’d potentially gain by reaching the next LTV bracket.

Are low deposit mortgages more expensive?

They can be. Generally, the higher the LTV, the greater the risk to the lender, and that can mean a higher interest rate. You’re also borrowing more money, which naturally affects the monthly payment.

If you’re buying a £250,000 property with a 10% deposit, you’re borrowing £225,000. Buy the same property with a 2% deposit and you’re borrowing £245,000, so that’s another £20,000 you’re paying interest on before you even consider any difference in the mortgage rate.

But there is another side to that argument. If getting from a 2% deposit to a 10% deposit takes you another three years, you’ll potentially spend another three years paying rent while you’re saving. House prices could rise or fall, mortgage rates could change and your income or personal circumstances could be completely different by then.

That’s why there isn’t a blanket answer of “always save a bigger deposit” or “always buy as soon as possible.” You need to compare the numbers based on your own circumstances.

What are the risks of a 100% mortgage?

One of the biggest risks to understand is negative equity. If you buy a £250,000 property using a 100% mortgage, you’re starting with virtually no equity in the property. If its value subsequently falls to £235,000 while your mortgage balance is still above that figure, you could owe more than the property is worth.

If you’re happily living there, making your payments and have no plans to move, that doesn’t necessarily cause an immediate problem. It becomes more relevant if you need to sell or remortgage while you’re in negative equity, because you may not have enough equity to repay the existing mortgage or move onto another product.

A bigger deposit gives you more of a buffer against falling property values. It’s one of the reasons why “I can get a 100% mortgage” and “a 100% mortgage is right for me” are two completely different things.

Can my parents help me buy?

Yes, and simply handing you £20,000 isn’t the only way they can do it.

The most obvious route is a gifted deposit, where a family member gives you some or all of the money required for your deposit. The lender will normally want confirmation that the money is genuinely a gift and isn’t expected to be repaid.

There are also family-assisted mortgages where family savings or property equity can potentially be used as additional security. Alternatively, a Joint Borrower Sole Proprietor mortgage can allow a parent’s income to be included when calculating how much you can borrow without them necessarily becoming a legal owner of your home.

So if your parents want to help but don’t have a large lump sum they can simply give you, it’s still worth exploring the other options available.

What about a Lifetime ISA?

If you’re still saving towards your first home, a Lifetime ISA (LISA) is worth understanding. Eligible savers can contribute up to £4,000 each tax year and receive a 25% government bonus, subject to the LISA rules. That means putting £4,000 into your LISA could result in the government adding another £1,000.

If you’re buying with another eligible first-time buyer and you both have LISAs, you could potentially both use your respective savings and bonuses towards the purchase.

There are rules around your age, the maximum property purchase price, how long the account has been open and what happens if you withdraw the money for another purpose, so make sure you understand those before relying on the funds for your purchase.

Don’t forget the other costs of buying

A 100% mortgage doesn’t necessarily mean you can buy a house with £0 in the bank. Even if you don’t need a traditional deposit, you’ve still potentially got solicitor and conveyancing fees, survey costs, mortgage or valuation fees, moving costs, buildings insurance and Stamp Duty where applicable.

Then you’ve got the costs that start after you get the keys. Furniture, appliances, decorating and repairs can quickly add up, and it’s sensible to have something left behind for emergencies if you can.

Personally, I’d much rather see someone complete with some money still sitting in the bank than throw absolutely every penny they have into buying the property. The boiler doesn’t care that you’ve just spent your entire savings moving house.

Can I get a low deposit mortgage with bad credit?

Potentially, although your options may be more limited. A missed payment three years ago isn’t necessarily treated the same as a recent default or CCJ, and different lenders have very different appetites for previous credit issues.

This is also where specialist lenders can become useful. Something appearing on your credit file doesn’t automatically mean you can’t get a mortgage, but it could reduce the number of lenders available, affect the interest rate you’re offered or mean you need a bigger deposit.

If you’ve had credit issues in the past, it’s generally better to understand how lenders are likely to view them before assuming either that you’ll definitely be declined or that they’ll make no difference.

Should I wait until I’ve saved a 10% deposit?

Maybe, but find out what your options are first.

If you’re sitting with £10,000 saved and assuming you can’t buy until that becomes £25,000 or £30,000, you could potentially be delaying unnecessarily. On the other hand, if waiting another six months gets you into a lower LTV bracket and gives you access to a significantly better mortgage, waiting could make complete sense.

The point is that you shouldn’t pick an arbitrary deposit figure and work towards it without knowing what that figure actually gets you. Compare what buying now would look like against continuing to rent and save. Look at the mortgage rate, monthly payment, how quickly you’re saving, what you’re spending on rent and what difference a bigger deposit would actually make.
Maybe waiting wins. Maybe buying now wins. At least you’re making that decision based on the actual numbers rather than a deposit figure somebody told you that you needed five years ago.

So, how much deposit do you actually need?

There isn’t one answer anymore. Depending on your circumstances, the property you’re buying and what’s available in the mortgage market at the time, you could potentially be looking at anything from a traditional 10% deposit right through to no buyer-funded deposit at all.

As things stand, the market includes 90% mortgages with a 10% deposit, 95% mortgages with 5%, options at 98% LTV with around 2%, fixed £5,000 and £10,000 deposit products, family-assisted mortgages and certain products that can potentially reach 100% LTV.

That’s quite a difference from simply assuming “I need a 10% deposit.”

Low deposit mortgages: the bottom line

The deposit is still one of the biggest hurdles facing first-time buyers, and I’m not going to pretend otherwise. Saving thousands of pounds while you’re paying rent, bills and everything else isn’t easy.

What has changed is the number of ways we can potentially approach that problem. We’ve now got major banks, building societies and specialist lenders offering everything from conventional 5% deposit mortgages through to 2% deposits, fixed £5,000 deposits, family-assisted options and even 100% LTV mortgages.

For some people, putting down 10% will still be the right thing to do. For others, 5% might make more sense. Someone else could be better off using a 2% deposit product, while another buyer might benefit from family support or one of the more specialist no-deposit options.

The important thing is not to spend another two or three years trying to reach an arbitrary savings target without first finding out whether you actually need to.

Find out what’s available, find out what you can afford and compare the numbers. Then you can make an informed decision about whether buying now or continuing to save makes more sense for you.

You might be closer to buying your first home than you think.

Last updated: August 2026.

Mortgage products and lending criteria can change at any time. The lenders and products mentioned within this guide are examples of options available at the time of writing and don’t constitute a recommendation. Eligibility and the amount you can borrow will depend on your individual circumstances and the property being purchased.

Your home may be repossessed if you do not keep up repayments on your mortgage.