Saving up a deposit is the single biggest barrier to home ownership for most first-time buyers. The good news is that lenders have continued to innovate — and there are now mortgage products available that go well below the standard 5% deposit, with some requiring as little as 1% or even no deposit at all.

This guide explains the main types of low-deposit mortgages available and the trade-offs to think about before going for one.

The standard option: 95% mortgages (5% deposit)

The most common low-deposit option is a 95% loan-to-value (LTV) mortgage — you put down 5% of the property price as a deposit and borrow the remaining 95%.

There are hundreds of 95% products widely available, from most mainstream lenders. They make home ownership achievable with a much smaller deposit than older generations needed, but they typically come with higher interest rates than products with bigger deposits — because the lender is taking on more risk.

Very low deposit (sub-5%) mortgages

A small number of lenders have launched products that allow first-time buyers to put down significantly less than 5% — in some cases as little as 1% of the purchase price.

These are usually only available through brokers (rather than directly from the lender) and come with stricter eligibility criteria. They typically include things like:

• First-time buyers only
• Houses only (often excluding flats and new-build properties)
• A minimum and maximum purchase price
• Specific minimum loan amounts
• Restricted to longer-term fixed rates

The exact criteria vary by lender and change regularly, so they're best discussed directly with your adviser.

100% mortgages (no deposit)

A small number of lenders also offer 100% mortgages — financing the entire purchase price with no deposit required.

The most well-known type is the track-record mortgage, designed for renters who can prove they've consistently paid rent and household bills over a sustained period. The thinking is that if you can demonstrate you've been making rental payments at a similar level to what your mortgage payment would be, you've already shown you can afford the mortgage — even without a deposit.

Typical eligibility includes things like:

• You haven't owned a property recently (often within the last 3 years)
• You can prove a sustained rental and bill-payment history
• The new mortgage payment must be equal to or lower than your average recent rent

Again, criteria vary by lender and change over time — speak to your adviser for current options.

The trade-offs to consider

Low-deposit mortgages are powerful tools, but they come with real trade-offs.

Higher interest rates

The smaller your deposit, the higher your LTV — and higher LTV products usually carry higher interest rates because they're a bigger risk to the lender. Over the life of the mortgage, this can add up significantly.

Negative equity risk

If property prices fall and you have very little (or no) equity in your home, you could end up in negative equity — owing more on your mortgage than the property is worth. This is particularly relevant for 100% mortgages, where any drop in value puts you underwater immediately.

Stricter criteria

Lenders offering these products typically have tighter eligibility rules — credit history, income stability, property type and location can all narrow your options.

Is a low-deposit mortgage right for you?

A low-deposit mortgage might be the right choice if:

• You have stable income and a strong rental/credit history but limited savings
• Saving a larger deposit would take you years
• You're confident in your local property market and able to stay in the home for the medium-to-long term

It might not be the right choice if:

• You can realistically save a larger deposit within 12 to 18 months
• You're not confident you'll stay in the property long enough to ride out potential price dips
• The higher interest rate would stretch your monthly budget uncomfortably

The bottom line

Mortgage products in this space change regularly — new ones launch, eligibility criteria evolve, and rates move. The best way to find out what's currently available for your circumstances is to speak to a broker who can search the whole market.

If you'd like to explore your low-deposit options, get in touch with the team. We have access to over 90 lenders, including some products that are only available through brokers. You may also find our first-time buyer FAQs and our guide on what documents you'll need useful as you start the process.