95% LTV mortgages and coronavirus
Coronavirus has led to lenders temporarily pulled back on many of their mortgage products making it harder to get a 95% mortgage.
On 3 March 2021, the government announced a 95% LTV guarantee scheme to help first time buyers get a mortgage with just a 5% deposit.
These new deals are now available from many high street lenders, including NatWest, Barclays, HSBC and Halifax.
You can apply for a 5% deposit mortgage through a broker like Trussle, or by talking directly to your lender of choice.
What is a 95% LTV mortgage
A 95% LTV mortgage lets you borrow 95% of the money you need to buy a home.
Lenders look at the LTV of your mortgage when deciding how much they’ll lend you and what rate they’ll charge.
You can take out a 95% LTV mortgage if you’re a first time buyer, moving to another home or remortgaging.
95% LTV mortgage calculator
95% mortgage calculators let you work out how much you might be able to borrow with a 5% deposit, based on your salary.
They’ll usually tell you:
what price property you might be able to afford
what your monthly repayments could be
how much deposit you’d have to put down
A 95% mortgage calculator may work things out based on you borrowing 5 times your salary.
You can usually borrow 4 to 5 times your salary. A few lenders may allow you to borrow more.
You do not have to borrow the most they’ll offer you.
95% LTV mortgages for first time buyers
95% LTV mortgages can be a good idea for first time buyers as you only need to put down a 5% deposit.
You usually need a deposit of at least 5% deposit to get a mortgage.
You can get a 100% mortgage and not put down a deposit at all. But you’ll need help from a friend or family member to do this.
Learn more in our 100% mortgage guide.
Should I get a 95% LTV mortgage
The advantage of a 95% LTV mortgage is that you only need a 5% deposit which is smallest deposit most lenders allow.
The downside is that you’ll end up paying more than if you put down a bigger deposit.
The higher the LTV the more a lender will charge you in interest.
This is because your loan is a higher risk as you’re borrowing so much of the property’s value.
You might prefer to save for a bigger deposit before you buy a home so your monthly repayments will be smaller.
Best 95% LTV mortgages
Otherwise, speak to a mortgage broker.
Brokers have lots of deals to choose from. Some lenders only offer their mortgages through brokers.
Trussle works with 90 lenders with around 12,000 deals.
A broker will look at your personal situation and find the best deal for you.
They’ll also let you know what you'll pay over your initial period. This is the interest, capital repayments and any lender fees.
Compare 95% LTV (5% deposit) mortgage deals
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How hard is it to get a 95% LTV mortgage
To get a 95% LTV mortgage you’ll need a 5% deposit.
Like all mortgages, you’ll also have to show that you can afford it.
To decide if they can lend to you, a lender will look at you:
A lender will also want to make sure that you can afford your mortgage if interest rates rise.
Get some advice
If you do not think you can afford a 95% mortgage check with a mortgage broker. They might find a way of helping you get on the property ladder.
One option might be a government scheme.
Find out which one might suit you using our government homeownership scheme tool.
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Your home could be repossessed if you don't keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.