Buying a home is one of the biggest financial decisions you’ll make. For many people in the UK, saving for a deposit can feel like a major hurdle.
You might be asking yourself: “Can I get a mortgage with a small deposit?”
The good news is that, in many cases, yes it may be possible to get a UK mortgage with a small deposit.
In this guide, we’ll explain how small deposit mortgages work, what lenders may look at, and what options could be available whether you are buying a home to live in or considering a buy-to-let property.
This article uses plain English and practical examples to help UK homebuyers understand their mortgage options and make more informed decisions.
What Does “Small Deposit” Mean in UK Mortgages?
A mortgage deposit is the upfront amount you pay towards the purchase price of a property.
The bigger your deposit, the less you usually need to borrow from the lender. Most traditional lenders may prefer a deposit of around 15% to 20%, but some mortgage options may be available with a smaller deposit.
In the UK, a small deposit usually means:
- Less than 15% of the property value
- Commonly between 5% and 10%
- A higher loan-to-value mortgage
- Potentially fewer lender options compared with larger deposits
For example, if you are buying a property worth £200,000:
| Deposit Percentage | Deposit Amount | Mortgage Needed |
|---|---|---|
| 5% deposit | £10,000 | £190,000 |
| 10% deposit | £20,000 | £180,000 |
| 15% deposit | £30,000 | £170,000 |
| 20% deposit | £40,000 | £160,000 |
A smaller deposit can help you buy sooner, but it may also affect your mortgage rate, monthly repayments, and lender choice.
Why Do Deposits Matter?
Deposits matter because lenders use them to assess risk.
When you have a larger deposit, you are borrowing a smaller percentage of the property value. This can make the application look lower risk to the lender.
A smaller deposit may mean:
- Higher interest rates
- Stricter affordability checks
- Fewer mortgage products available
- Higher monthly repayments
- More focus on credit history and income stability
This does not mean a small deposit mortgage is impossible. It simply means lenders may look more closely at your overall financial position.
Can I Get a Mortgage with a 5% Deposit?
Yes, some UK lenders may offer mortgages with a 5% deposit, especially for first-time buyers.
A 5% deposit mortgage is often known as a 95% loan-to-value mortgage, because you are borrowing 95% of the property value.
For example:
| Property Price | 5% Deposit | Mortgage Amount |
|---|---|---|
| £180,000 | £9,000 | £171,000 |
| £200,000 | £10,000 | £190,000 |
| £250,000 | £12,500 | £237,500 |
| £300,000 | £15,000 | £285,000 |
These mortgages can help buyers get onto the property ladder sooner, but approval will depend on the lender’s criteria.
Lenders may consider:
- Your income
- Your monthly expenses
- Your credit history
- Your employment status
- Your existing debts
- The property type
- The size of your deposit
- Whether the mortgage is affordable now and in the future
Small Deposit Mortgage Options for UK Buyers
There may be several routes to explore if you have a small deposit.
These can include:
- 95% mortgages
- Shared Ownership
- Family-assisted mortgages
- Guarantor-style mortgage options
- First-time buyer mortgage products
- Lender-specific low-deposit schemes
- Regional or government-backed schemes where available
Some older schemes, such as Help to Buy Equity Loan in England, are no longer open to new applications, so it is important to check what support is currently available before making plans.
Shared Ownership and Small Deposits
Shared Ownership may be an option for buyers who cannot afford to buy a property outright.
With Shared Ownership, you buy a share of the property and pay rent on the remaining share. According to GOV.UK, buyers usually purchase a share between 25% and 75%, although some homes may allow a 10% share. The deposit is usually between 5% and 10% of the share being purchased, not the full property value.
For example:
| Full Property Value | Share Purchased | Share Value | 5% Deposit on Share |
|---|---|---|---|
| £250,000 | 25% | £62,500 | £3,125 |
| £250,000 | 40% | £100,000 | £5,000 |
| £300,000 | 50% | £150,000 | £7,500 |
This can make the upfront deposit more manageable, although buyers must also consider rent, service charges, mortgage payments, and future costs.
Example: Sarah’s First Home
Sarah wants to buy her first flat worth £200,000. She has saved £10,000, which gives her a 5% deposit.
Sarah may be able to explore a 95% mortgage, subject to lender criteria and affordability checks. She may also consider Shared Ownership if buying the full property is not affordable.
This means Sarah does not necessarily have to wait years to save a 15% or 20% deposit, but she does need to understand how the smaller deposit affects her mortgage options and monthly repayments.
Residential Mortgages with Small Deposits
Residential mortgages are for people buying a property to live in as their main home.
If you are applying for a residential mortgage with a small deposit, lenders will usually assess your full financial situation.
They may look at:
- Your salary or self-employed income
- Your regular bills
- Credit cards and loans
- Car finance
- Childcare costs
- Bank statements
- Credit file
- Deposit source
- Property value and condition
A small deposit does not automatically stop you from getting a mortgage, but your application needs to be strong in other areas.
Fixed-Rate Mortgages
A fixed-rate mortgage means your interest rate stays the same for a set period, usually 2, 3, or 5 years.
This can be useful for buyers with a small deposit because it gives more predictable monthly repayments.
Key features of fixed-rate mortgages:
- Monthly payments stay the same during the fixed period
- Easier to budget
- Protection from rate rises during the fixed term
- Rates may be higher than some variable options at the start
- Early repayment charges may apply if you leave the deal early
A fixed-rate mortgage may suit buyers who want stability and clearer monthly budgeting.
Variable-Rate Mortgages
A variable-rate mortgage means your interest rate can change.
This may be linked to the Bank of England base rate or the lender’s own standard variable rate.
Key features of variable-rate mortgages:
- Monthly payments can rise or fall
- May be cheaper at certain times
- Less predictable than fixed-rate deals
- Could become more expensive if rates increase
- May offer more flexibility depending on the product
With a small deposit, it is important to consider whether you could still afford payments if interest rates increased.
Fixed Rate vs Variable Rate Mortgage
| Mortgage Type | Main Benefit | Main Risk | May Suit |
|---|---|---|---|
| Fixed-rate mortgage | Predictable monthly payments | May cost more if rates fall | Buyers who want stability |
| Variable-rate mortgage | Payments may reduce if rates fall | Payments can increase | Buyers comfortable with change |
| Tracker mortgage | Usually follows base rate movement | Sensitive to rate rises | Buyers who understand rate risk |
| Standard variable rate | Flexible in some cases | Often higher than product rates | Short-term situations only |
Choosing between fixed and variable rates depends on your budget, risk tolerance, and future plans.
Buy-to-Let Mortgages with Small Deposits
Buy-to-let mortgages work differently from residential mortgages.
If you want to buy a property to rent out, lenders usually require a larger deposit. Many buy-to-let lenders may expect around 25% or more, although criteria can vary.
This means small deposit options are usually more limited for buy-to-let mortgages than for residential mortgages.
Why Do Buy-to-Let Mortgages Usually Need Larger Deposits?
Lenders often view buy-to-let mortgages as higher risk because the property is used as an investment.
They may consider:
- Rental income
- Your personal income
- Landlord experience
- Property type
- Interest coverage ratio
- Existing mortgage commitments
- Tax position
- Deposit size
A larger deposit can help reduce the lender’s risk and may improve the range of mortgage options available.
Real-Life Example: James, the Landlord
James wants to buy a flat to rent out. The property costs £100,000, and he has saved £20,000.
This gives James a 20% deposit.
However, many buy-to-let lenders may require a deposit of around 25%. James may need to save more, consider a different property, or speak to a mortgage adviser about whether any suitable lender options exist.
If a lender does accept a lower deposit, the rate may be higher and the criteria may be stricter.
What Other Factors Affect Getting a Mortgage with a Small Deposit?
Your deposit is important, but it is not the only factor lenders consider.
A lender may also assess your income, credit history, expenses, property type, and overall affordability.
Your Income and Expenses
Lenders want to see that the mortgage is affordable.
They may look at:
- Basic salary
- Overtime or bonus income
- Self-employed income
- Benefits or additional income
- Credit commitments
- Living costs
- Dependants
- Bank statements
Even with a small deposit, stable income and controlled spending may support your application.
Your Credit History
Your credit history can affect your mortgage options.
A stronger credit profile may improve your chances of being accepted and may help you access better mortgage rates.
Lenders may review:
- Missed payments
- Defaults
- County Court Judgments
- Credit card balances
- Loan repayments
- Electoral roll registration
- Credit utilisation
- Recent credit applications
If your credit history is less than perfect, it does not always mean you cannot get a mortgage. However, your lender options may be more limited, especially with a small deposit.
Property Type and Location
The property itself also matters.
Some lenders may be more cautious with:
- Flats above commercial premises
- High-rise flats
- Non-standard construction
- Ex-local authority properties
- Properties needing major repairs
- Short leases
- Unusual locations
With a small deposit, lenders may be stricter about the type of property they are willing to accept.
Tips for Getting a Mortgage with a Small Deposit
If you want to improve your chances of getting a mortgage with a small deposit, preparation matters.
Here are some practical steps:
1. Save What You Can
Even a slightly larger deposit may open up more mortgage options.
For example, increasing your deposit from 5% to 10% could improve the range of deals available and may reduce monthly repayments.
2. Check Available Schemes
Explore current UK schemes and lender options that may support buyers with smaller deposits.
These may include:
- Shared Ownership
- First-time buyer mortgage products
- Family-assisted mortgage options
- Regional home ownership schemes
- Lender-specific low-deposit products
Always check whether a scheme is currently open and suitable for your circumstances.
3. Improve Your Credit Score
Before applying for a mortgage, check your credit file.
You may be able to improve your position by:
- Paying bills on time
- Reducing credit card balances
- Avoiding unnecessary credit applications
- Registering on the electoral roll
- Correcting errors on your credit report
- Keeping overdraft use under control
4. Reduce Monthly Commitments
Lenders assess affordability carefully.
Reducing existing debts or regular commitments may help strengthen your application.
This could include:
- Credit cards
- Personal loans
- Car finance
- Store cards
- Buy now, pay later balances
- Unused credit facilities
5. Get Professional Mortgage Advice
A mortgage adviser can help you understand which lenders may consider your situation.
This can be especially helpful if you have:
- A small deposit
- Self-employed income
- Bad credit history
- Irregular income
- Existing debts
- A complex property type
- Buy-to-let plans
6. Consider Your Long-Term Finances
A mortgage should be affordable beyond the first month.
Think about:
- Future interest rate changes
- Bills and living costs
- Insurance
- Repairs and maintenance
- Job security
- Family plans
- Emergency savings
Buying sooner can be helpful, but only if the mortgage remains manageable.
Small Deposit Mortgage Checklist
Before applying, it can help to prepare the following:
| Checklist Item | Why It Matters |
|---|---|
| Deposit saved | Shows how much you can contribute upfront |
| Proof of deposit | Lenders need to know where funds came from |
| Credit report checked | Helps identify issues before applying |
| Income documents ready | Supports affordability assessment |
| Bank statements prepared | Shows spending habits and commitments |
| Debts reviewed | Lower commitments may improve affordability |
| Property type checked | Some properties are harder to mortgage |
| Adviser contacted | Helps identify suitable lender options |
Final Thoughts
Getting a mortgage with a small deposit is possible for many UK homebuyers, especially if you understand your options and prepare properly.
For residential mortgages, some lenders may consider deposits as low as 5%, subject to affordability, credit history, and lender criteria.
For buy-to-let mortgages, larger deposits are usually required, often around 25% or more.
The key is to understand how your deposit affects your mortgage options, monthly repayments, and lender choice.
A small deposit does not mean your homebuying plans are impossible. It simply means your application needs to be well prepared.
Need Help Finding a Mortgage with a Small Deposit?
At BSL Financials, we understand that navigating the mortgage market can feel confusing, especially when your deposit is smaller than you hoped.
Our experienced team can help you explore your mortgage options, explain what schemes may be available, and support you in finding a mortgage that suits your needs and budget.
Get in touch with BSL Financials today for a friendly, no-obligation chat about your mortgage options.
You do not have to figure it out alone.
