Can you get a mortgage with a low deposit?
Published: 14 July 2026
The word ‘deposit’ is enough to give many first time buyers nightmares. That’s because these days, putting down eye-watering amounts of money to get on the property ladder isn’t unusual. And a large deposit is usually only possible with years of hard-slog saving (or the deep pockets of the bank of mum and dad).
But could buying your first home with a low deposit mortgage be an option? Let’s find out.
What is a low deposit mortgage?
A low deposit mortgage is one which allows you to buy a home by putting down a smaller deposit (usually 5% or less). It’s sometimes called a high loan to value (LTV) mortgage (such as 98% LTV), because the mortgage, or loan, covers most of the value of the property.
Low deposit mortgages usually have higher interest rates than mortgages that require a larger deposit because they’re riskier for lenders.
How does a low deposit mortgage work?
Low deposit mortgages work by the buyer putting down a smaller percentage of the property’s value as a deposit - with the rest covered by a mortgage.
Let’s look at an example of a house valued at £300,000, with a 2% deposit.
To cover the property’s £300,000 purchase price, the buyer puts down a 2% deposit of £6,000, and the mortgage is for £294,000.
Who can qualify for a low deposit mortgage?
Low deposit mortgages are usually just for first time buyers and like any mortgage, it’s up to your lender if you qualify for one or not. Before they make a decision, they’ll want to know stuff like:
- Can you afford the monthly repayments (especially if interest rates go up)?
- How good is your credit score? If your score is high, then this will help your application
- Can you show proof of regular income through your payslips (if you have a job) or the last 2 years of self-assessments (if you're self-employed)?
What are the pros and cons of low deposit mortgages?
Low deposit mortgages have good points and bad points.
Pros of low deposit mortgages
- They could help you buy a home sooner
- A smaller deposit when compared to other mortgages
Cons of lower deposit mortgages
- Usually, there's less choice than with other mortgages
- Interest rates can be higher than other mortgages
- There's a chance you could slip into negative equity if house prices fall (this is when you owe more on the mortgage than the property is worth)
Tips to help improve your low deposit mortgage application
Being approved for a low deposit mortgage can be tough. You can boost your chances of lenders ticking 'yes' on the application. Here are just a few ways:
- Get your credit score in shape- Always pay your bills on time, and try not to apply for credit 3-6 months before making a mortgage application
- Register to vote - Lenders use electoral roll data when carrying out ID and background checks, so make sure you're on it
- Don't spend, spend, spend - Lenders will check if you can cover your payments, so think about reining in what you spend on the non-essential (like expensive gym memberships or subscriptions)
Introducing Start Mortgages for first time buyers
We recently launched Start Mortgages, to help first time buyers get on the property ladder.
You may be able to borrow up to 98% of the property value and up to 5 times your annual income (minimum annual income required is £30,000). A minimum deposit of 2% or £5,000 is needed, whichever is greater.
To find out more, visit our website or ask your mortgage broker about Start Mortgages. You can also contact us directly on 03450 505 075 or book a telephone appointment.
You're up to date
So now you're in the know about low deposit mortgages. Good luck on your homebuying journey!
Mortgage applicants must be 18 years or over and UK residents only.
Mortgages are subject to eligibility, status and financial standing.
Your property could be repossessed if you don't keep up on your mortgage repayments.
This article is not advice, and you should seek independent financial or legal advice if needed
