How much deposit do I need for a 95% mortgage?
So, if you want to buy a home valued at £200,000, a 95% mortgage will cover £190,000 of the cost and you’ll need to put down a 5% deposit of £10,000. 95% mortgages are also sometimes referred to as 95% LTV mortgages. LTV stands for loan to value.
How affordable is a 5% deposit for first time buyers?
For many people keen to get on the property ladder, 5% deposit mortgages for first time buyers are the only affordable choice. However, the more you are able to save towards a deposit, the more likely you are to get accepted for a mortgage, and the cheaper the interest rate will be.
Is a 95% mortgage good for first-time buyers?
95% mortgages are good for first-time buyers, who often struggle to save up more than a 5% deposit, but they won’t offer as much choice as those who can put down a bigger deposit. They also tend to come with higher interest rates.
What does the new 95% mortgage scheme mean for homebuyers?
Under the new scheme, homebuyers taking out a mortgage should not see any practical difference to their mortgage journey. Lenders (banks and building societies) will be encouraged to offer 95% mortgages based on the government guaranteeing outstanding loans.