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Are There Still 5% Mortgages for First-Time Buyers?

First-time buyers are often advised that they need at least a 5% deposit to secure a first-time buyer mortgage – but is it possible to purchase a home with a 5% down payment, and are these 95% mortgages for first-time buyers widely available?

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2024-06-05
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Are There Still 5% Mortgages for First-Time Buyers?

First-time buyers are often advised that they need at least a 5% deposit to secure a first-time buyer mortgage – but is it possible to purchase a home with a 5% down payment, and are these 95% mortgages for first-time buyers widely available?

The quick answer is that 5% mortgages first-time buyers certainly exist, and one of the many first-time buyer help programmes is the government mortgage guarantee scheme, which allows applicants to take out a first-time buyer mortgage with a minimal 5% deposit.

Let’s look in more detail at 5% mortgages for first-time buyers, how they work, and other options to help you achieve a first-time buyer mortgage.

Applying for 95% Mortgages for First-Time Buyers

Provided first-time buyers meet all of their selected lender’s eligibility requirements, they will normally be able to get one of the varied 5% mortgages first-time buyers with a 95% Loan to Value (LTV).

That means the first-time buyers pay a 5% deposit and borrow the remaining 95% through a first-time buyer mortgage. However, lender criteria still apply to first-time buyers, so they will look at your affordability, income and credit rating, among other factors.

The first-time buyer mortgage guarantee scheme also means there are more products with a 5% deposit requirement and more lenders who will potentially offer 5% mortgages for first-time buyers.

However, it is worth pointing out that the 95% mortgages for first-time buyers available through the scheme aren’t necessarily the most competitive, depending on your requirements. There are multiple specialist lenders and banks offering deals for first-time buyers that could be more advantageous.

The best way to secure a first-time buyer mortgage with a great interest rate is to work with an independent broker who can suggest the right options for first-time buyers with a deposit of any size.

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Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.


Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.


Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

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Alternatives to 95% Mortgages for First-Time Buyers

We always ensure our clients have the right knowledge of the different first-time buyer mortgage products and types, including some of the alternative first-time buyer help schemes that may be applicable.

For example, you could be eligible for the following:

  • Right to Buy, which helps first-time buyers in council homes buy their properties with a first-time buyer mortgage at a heavily discounted value.
  • Right to Acquire, a first-time buyer help scheme for tenants of housing associations in much the same way.
  • The First Homes scheme assists first-time buyers on a low income, including key workers, with generous discounts.

Please get in touch if you’d like more information about the varied programmes for first-time buyers that might help you get onto the property ladder.

Other First-Time Buyer Help Initiatives

First-time buyers often assume they need to apply to a specific scheme to be able to access 5% mortgages for first-time buyers, but provided you meet the lender's criteria, you can apply for any mortgage you may wish.

The challenge is that many first-time buyers do not have a large deposit and therefore are prevented from applying for the most affordable mortgages, which is where 95% mortgages for first-time buyers prove useful.

Some of the first-time buyer help schemes may be more relevant than others, including:

  • The first-time buyer mortgage guarantee scheme, where the government guarantees the mortgage to offset the lender’s risk and make it more likely that participating lenders will offer 5% mortgages for first-time buyers with a five-year fixed-rate term.
  • Shared Ownership is another potentially helpful scheme, where those with a low deposit can purchase a share of a property from a housing association, paying a nominal rent on the proportion owned by the organisation.

Other first-time buyer mortgage products can be made available with support from family members, either by helping with your deposit or acting as a guarantor to improve your eligibility for a competitive interest rate and low-interest product.

Guarantor mortgages mean somebody, normally a parent, guarantees your first-time buyer mortgage, acting as a safeguard where you have a small deposit and wouldn’t otherwise qualify for a first-time buyer mortgage.

A similar product called a family offset mortgage means a relative deposits funds into a secure account to act as a guarantee for the lender offering the product for first-time buyers.

Finally, you could consider a joint buyer, sole proprietor mortgage - a further option where you purchase a property as first-time buyers in conjunction with a relative, retaining 100% ownership of the home, but with them as a named person on the mortgage deeds, making it easier to qualify for a first-time buyer mortgage.

Choosing the Right 5% Mortgages for First-Time Buyers

There are multiple lenders and products, each with pros and cons, so it is important not to move ahead with the initial mortgage you come across. You can also verify whether 95% mortgages for first-time buyers you think you will qualify for are competitive compared to other options.

Lenders offering 95% mortgages for first-time buyers still have discretion whether they offer to lend, so first-time buyers with adverse credit, for example, may need professional first-time buyer help to find a suitable provider – they will normally find that mainstream banks will automatically refuse their applications due to bad credit history or a low credit score.

Mainstream banks such as Santander, Barclays and HSBC currently have 5% mortgages for first-time buyers, but you will still need to pass their affordability assessments and credit checks to proceed.

It is also not always the case that 95% mortgages for first-time buyers backed by the first-time buyer mortgage guarantee scheme have competitive interest rates. Niche lenders and providers may offer far better rates for first-time buyers, with or without products enrolled in the government initiative.

Some of the best lenders for first-time buyers do not advertise to the public and only accept applications from their approved network of lenders, so it is highly advisable you consult a whole-of-market broker specialising in first-time buyer help to make informed decisions.

Professional Support for First-Time Buyers

Revolution Finance Brokers has years of experience working with first-time buyers with varying circumstances, analysing their requirements, matching their borrowing needs with lenders and handling the application process end to end.

If you need first-time buyer help and are not 100% confident which interest rates for first-time buyers are the most affordable or whether 95% mortgages for first-time buyers are the right fit, please get in touch at your convenience.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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Frequently Asked

A 5% mortgage for first-time buyers refers to a mortgage product where a 5% deposit is acceptable. As a general standard, most lenders will accept 5% to 10% as the minimum down payment, so these products are well suited to first-time buyers who cannot save a larger deposit or want to move forward quickly.

The first-time buyer mortgage guarantee scheme was launched to support those struggling to save a large enough deposit to qualify for many of the products designed for first-time buyers.

In effect, the government guarantees the loan, provided the applicant passes the lender's eligibility checks and has at least a 5% down payment. These 95% mortgages for first-time buyers are only available from lenders enrolled in the scheme, and while they can be advantageous, they aren't always the most competitive product for some first-time buyers.

If you have a 5% deposit and would like to apply for a 95% mortgage suited to first-time buyers, we’d recommend getting in touch with Revolution Finance Brokers at your convenience for professional, independent first-time buyer help.

With countless products and lenders, we provide whole-of-market access to ensure first-time buyers find the most suitable and affordable mortgage products for them.

Regardless of whether a product is part of a first-time buyer help scheme, you will need to comply with the lender’s terms. If they feel first-time buyers are non-compliant due to their income, employment type or age, lenders can turn down any applicants they do not wish to lend to.

In contrast, there are many specialist and niche lenders, many of whom do not deal directly with the public, who provide excellent first-time buyer mortgage deals and can structure agreements around adverse credit. Others will consider applicants with bad credit and ask for context about the circumstances around which the bad credit occurred.

Potentially, yes. As a rough indication, first-time buyers with a 10% deposit will pay somewhere around 1% less in interest rates compared to those with a 5% deposit.

While the first-time buyer mortgage guarantee scheme makes it more accessible to apply for 95% mortgages for first-time buyers, that doesn't always mean a qualifying product will have a low-interest rate.

It is also essential first-time buyers understand the small print and real costs of any first-time buyer mortgage they apply for.

For instance, a first-time buyer mortgage that looks to have a competitive interest rate might be attractive – but if it has heavy product charges and application fees on top of the interest, another mortgage might actually be far more affordable and carry lower overall costs.

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The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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