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95% mortgages

Find out how 95% mortgages work, whether you could get one and how much you could borrow

In this article
Coronavirus (COVID-19) mortgage update What is a 95% mortgage? Video: how 95% mortgages work 95% mortgage calculator: how much could you borrow? 95% mortgage rates
Could you get a 95% mortgage? Can you get a 95% mortgage on a new-build home? Can your family help you get a 95% mortgage? The disadvantages of 95% mortgages Alternatives to 95% mortgages

Coronavirus (COVID-19) mortgage update

The government has announced a series of temporary reforms for homeowners, including the ability to apply for a three-month mortgage payment holiday. 

You can find more of the latest updates and advice over on our dedicated Which? coronavirus information hub.

What is a 95% mortgage?

A 95% mortgage is a loan for 95% of a property’s price, where you put down a 5% deposit to cover the rest.

For example, if you wanted to buy a house worth £200,000 with a 95% mortgage, you would put down £10,000 of your own money and borrow the remaining £190,000.

You might see 95% mortgages described as having a '95% LTV'. This stands for loan-to-value and simply means the percentage of the property's value that's being covered by the mortgage. Our LTV calculator lets you work out what LTV you'll need to borrow at.


Video: how 95% mortgages work

Watch our short video to understand the basics of 95% mortgages.

95% mortgage calculator: how much could you borrow?

You could theoretically borrow up to five times your salary (or combined salary if you’re buying with someone else) with a 95% mortgage.

For example, if you had saved a 5% deposit of £10,000 for a £200,000 home, you'd usually need a salary of at least £38,000 (or a combined salary of the same amount for a couple) to be able to borrow the remaining £190,000, although this will vary depending on the lender and your personal circumstances. 

Use our calculator to find out how much you could borrow with a 95% mortgage.

95% mortgage rates

95% mortgages have traditionally had higher interest rates than other mortgages.

For example, when we assessed the mortgage market in June 2019, we found that the best rate available on a 95% mortgage was 3.08%, while the best rate at 90% LTV was 2.21%.

This is because lenders charge more for the added risk they're taking on in lending you such a high percentage of the property's value. 

For this reason, it can sometimes be worth saving up for a bit longer in order to build a bigger deposit. However, if house prices are rising fast in your area, you might decide that it's best to buy now, before you're priced out of the market.

It's also worth bearing in mind that the gap between rates at 95% LTV and lower LTVs has narrowed a lot over the last few months, so this is a less significant factor than it used to be.

Could you get a 95% mortgage?

95% mortgages are available to both first-time buyers and home movers.

But saving up a 5% deposit is only half the battle – you’ll need to be able to prove that you earn enough to meet the monthly mortgage repayments before anyone will consider giving you a 95% mortgage.

Affordability testing

While your salary is an important starting point, this isn’t the only factor lenders will take into account. They'll assess the full range of your income, regular outgoings and any debt, among other things, when working out whether you can afford a mortgage.

They'll also 'stress test' your finances. This means checking whether you could still afford the mortgage payments if interest rates were to rise. You can see what this would look like using our mortgage interest calculator.

Speak to a mortgage broker if you want guidance on getting yourself into the best possible position before applying.

Credit score

To increase your chances of qualifying for a 95% mortgage you’ll need a good credit score, with a history of paying bills, loans and credit cards on time. If you’re also paying rent, you can choose to incorporate this into your Experian credit history.

Making sure that you're registered on the electoral roll is a quick and easy way of boosting your credit score. 

Can you get a 95% mortgage on a new-build home?

Only a few lenders offer 95% mortgages on new-build homes.

If you're interested in buying a new-build property but can't borrow enough, it might be worth looking into a Help to Buy equity loan, where you can boost a 5% deposit with a government loan, meaning you take out a smaller mortgage.

Can your family help you get a 95% mortgage?

If your family are keen to help you get on the ladder, they have a few options with certain mortgage deals:

  • Giving a 'charge' over some of the value in their own home, as security for your mortgage
  • Putting their savings into a special account as security for your mortgage
  • Sharing the responsibility with you for the mortgage and the monthly repayments

This means you might be able to pay less interest, or borrow more.

Find out more: how parents can help first-time buyers

The disadvantages of 95% mortgages

Interest rates

As we mentioned earlier, the bigger the loan-to-value (LTV) ratio of your mortgage, the higher the interest rate you’ll (usually) be charged.

For this reason, it can sometimes be beneficial to save up a bigger deposit so you can get a cheaper mortgage deal, depending on what's happening to house prices in your area.

The chart below shows the difference in the average interest rate of a two-year fixed-rate mortgage, depending on the loan-to-value.

Difficulty remortgaging


Taking out a 95% mortgage could make it difficult to remortgage to a better rate when your deal ends, as it can take a while to build up enough equity to qualify for better deals.

Negative equity

If the value of your home falls, there’s a risk you could end up in negative equity. This is where you owe more on your mortgage than your property is worth.

The more equity you hold in your property, the smaller the risk of falling into negative equity - so if you've put in a bigger deposit in the first place you're automatically decreasing the likelihood of this happening.

Alternatives to 95% mortgages

A 95% mortgage is just one option if you have a small deposit. Other options include:


Shared ownership

You could buy a 25%-75% share of a property under shared ownership and pay rent on the remaining share. You'd only need a mortgage for your share of the property, so you might be able to borrow at a lower LTV and therefore qualify for better rates.

Help to Buy equity loans

If you're interested in buying a new-build, you could look into Help to Buy equity loans

Here, you put down a deposit of at least 5% and the government loans you a further portion of the property price (40% in London, 20% in the rest of England and Wales, and 15% in Scotland) meaning you only need to take out a mortgage for the rest of the property's value.