A small deposit is one of the most common barriers to buying, but it is rarely the whole story. There are several routes designed for buyers who cannot put down 10 or 20 per cent, and knowing them helps you plan rather than give up.
This guide sets out the main low-deposit options and how they work. It is general information, not financial advice, so read it to understand the landscape and then speak to an FCA-authorised broker about which route fits you.
95 per cent mortgages
Many lenders offer mortgages up to 95 per cent of a property's value, meaning a 5 per cent deposit. The rate is usually higher than lower loan-to-value deals because the lender takes on more risk, and affordability checks still apply. A clean credit record helps you reach these products.
Gifted deposits
A gift from a parent or close family member is a common way to boost a deposit. Lenders will normally ask for a letter confirming the money is a genuine gift with no expectation of repayment and no stake in the property. Done properly, a gifted deposit is straightforward and widely accepted.
Shared ownership
Shared ownership lets you buy a share of a home, often between a quarter and three quarters, and pay rent on the rest to a housing provider. Because you only mortgage the share you own, the deposit needed is smaller. You can usually buy further shares over time, which is known as staircasing.
Family support: guarantor and JBSP
If your own income or deposit falls short, family can help without simply handing over cash.
- Guarantor mortgages, where a relative agrees to cover payments if you cannot.
- Joint borrower sole proprietor, where a relative's income helps you qualify but they do not own a share.
- Family offset or springboard deals, where family savings support the loan.
Government and regional schemes
Support schemes change over time and vary across England, Scotland, Wales and Northern Ireland. Some help with the deposit, others with buying a share. Because availability shifts, check what is currently open in your area, and treat any scheme as one option among several rather than the only way in.
Common questions
What is the smallest deposit I can use?
5 per cent is the usual minimum for a standard residential mortgage, through a 95 per cent product. Some family-supported deals can reduce the cash you need further.
Will a lender accept a gifted deposit?
Most will, provided it is a genuine gift with no repayment expected. You will usually need a signed letter from the person giving it, and the lender may run checks on the source of the funds.
Is shared ownership cheaper?
The upfront cost is lower because you buy a share, but you also pay rent on the rest, and there may be a service charge. It suits some buyers well, so weigh the total monthly cost carefully.
Do low-deposit mortgages cost more?
Generally the rate is higher at 95 per cent than at lower loan to value, because the lender takes more risk. As you build equity you can often remortgage to a better rate.
Can I use a guarantor if my income is low?
Yes. Guarantor and joint borrower sole proprietor arrangements let a relative's income or property support your application, which can bridge an affordability gap.