What is a 95% LTV mortgage

A 95% LTV mortgage lets you borrow 95% of the money you need to buy a home.

LTV stands for loan to value. LTV is the ratio between the loan you take out and the value of the property.

It’s expressed as a percentage.

The LTV of your mortgage is very important as lenders consider it 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.

But you don’t 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.

This is usually the minimum deposit you need to get a mortgage.

It’s possible to 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 so.

See our guide on 100% mortgages to find out more.

Should I get a 95% LTV mortgage

The advantage of a 95% LTV mortgage is that you only need the smallest deposit that most lenders allow, which is 5%.

The downside is that you’ll end up paying more than if you put down a bigger deposit.

The higher the LTV the more interest a lender will charge you.

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 because your monthly repayments will be smaller.

Best 95% LTV mortgages

Most lenders offer 95% LTV mortgages and it can be difficult to work out which one’s best for you. 

You can find help in our guide about how to compare mortgage rates and deals.

Otherwise, speak to a mortgage broker.

Brokers have lots of deals to choose from and some lenders only offer their mortgages through brokers.

Trussle, for example, 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 the deal’s true cost, so you don’t pay more than you’re expecting.

The true cost is the total amount you'll pay back over the initial period. This means the interest, capital repayments and fees, minus any incentives like cashback.

How hard is it to get a 95% LTV mortgage

To get a 95% LTV mortgage you’ll need a 5% deposit.

As with all mortgages, you’ll also have to show that you can afford it.

A lender will look at a number of different things to decide whether you can or not.

These include:

A lender will also want to make sure that you can afford your mortgage if interest rates rise.

Get some advice

If you don’t think you can afford a 95% mortgage check with a mortgage broker as they might find a way of helping you get on the property ladder.

One option might be a government homeownership scheme.

Try our government homeownership scheme tool to find out which one might suit.

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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.

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