More 95% mortgages are entering the market as the Freedom to Buy mortgage scheme encourages more lenders to offer accessible mortgages by reducing the amount customers need to save for a deposit.
What is a 95% mortgage?
A 95% mortgage is a type of mortgage that allows you to borrow 95% of the property price from a mortgage lender. The remaining 5% is covered through your deposit.
If you’ve been saving to buy your first, or next home, but haven’t yet saved up a big enough deposit, you could be eligible to apply for a 95% loan to value (LTV) mortgage. This means that you may be able to buy a home with just a 5% deposit.
Freedom to Buy
The Freedom to Buy scheme has replaced the Mortgage Guarantee scheme that ended in June 2025.
Like the Mortgage Guarantee scheme, it hopes to encourage lenders to offer first time buyers, and homemovers, mortgages with as little as a 5% deposit. It aims to achieve this by acting as a safety net for lenders.
Lenders will pay a fee for the government guarantee which, if needed, will cover them for any losses they incur (for instance, if the house is repossessed). In return, lenders will have greater incentive to offer 95% mortgage products to people looking to buy a new home, as they’ll carry less risk.
Ben Thompson (Deputy CEO) gives his opinion on the new scheme:
“The Freedom to Buy scheme is a bold and pragmatic step towards tackling the barriers facing first time buyers. By extending mortgage access through lower deposit requirements, fairer affordability checks, and greater lender flexibility, the government is recognising the real financial challenges that aspiring homeowners face.
“This is a very welcome move towards a more inclusive housing market and a financial system that better reflects how people actually live and spend today. We look forward to working with policymakers and lenders, and of course aspiring first time buyers, to ensure these reforms translate into real opportunities for buyers across the UK.”
So can I get a mortgage now?
You might have guessed it, but this all depends on your individual circumstances and affordability, which a mortgage adviser can help with. However, as you now only need a 5% deposit for a 95% mortgage, you may well find that you have enough to get on the property ladder!
For example, let’s say you were aiming to buy a home for £200,000 through a 95% LTV mortgage. Your deposit would be £10,000. You could even use savings from a Lifetime ISA to put towards your deposit.
If you still think you might not have enough, take a look at our article on buying a home with a small deposit.
Find out if a 95% mortgage product is right for you and get in touch with us today.
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Important information
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