What options do I have if I have a low deposit?
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What options do I have if I have a low deposit?
Can I get a mortgage with a low deposit? Can I get a mortgage with less than 5% deposit?
Yes. Some lenders require no deposit at all, while others are happy with £5,000 or a 2% deposit, subject to other criteria being met, of course.
Most providers at this level require the customer to be a first-time buyer, but not always [information correct at the time of recording in April 2026].
What are the requirements for a mortgage if I have a low income?
The requirements for a mortgage with a low income are essentially the same as with a larger income, but the amount you can borrow is directly related to what you earn.
Having a low income will mean you either need a bigger deposit to buy a property, or you’ll have to buy a cheaper home. Buying jointly with someone is one way of boosting affordability.
What low deposit schemes are available?
One such scheme is Deposit Unlock, designed to make it easier to buy new build properties with only a 5% deposit, which can otherwise be difficult.
It only applies to new build properties from particular developers, and with certain mortgage lenders. If you’re interested in a new build property, ask the developer if Deposit Unlock is available.
Shared Ownership is another such scheme. It helps those with a small deposit by allowing you to buy a proportion of a property instead of the entire home. You still need to have a 5% deposit, but it’s 5% of a lower purchase price.
You would then pay rent on the proportion of the property you don’t buy, which would remain under the ownership of a housing association.
If you’ve got a small deposit, the Lifetime ISA can be helpful, as it can boost your savings. You pay up to £4,000 a year into the ISA, and then the government adds a 25% annual bonus. Saving up your deposit with one of these will enable you to buy a property sooner, as the funds will grow faster [all information correct at the time of recording in April 2026].
Can I get a mortgage with no deposit?
Yes, you can. Some banks will lend 100% of the purchase price. This will always be subject to meeting other criteria, such as being a first-time buyer, or having a track record of paying rent that’s proportionate to the expected mortgage payments.
Can my parents lend me money for a house deposit?
It’s possible they could lend you money for a house deposit, as opposed to gifting it to you.
But not as many lenders would accept that, while a gifted deposit is readily accepted by lenders.
They’ll want to understand the terms of the loan. Will there be any monthly payments, and will your parents be taking an interest in the property? These factors may make the loaned deposit unacceptable to the lender. Also, any monthly payments could reduce how much you can borrow.
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We will save you time by researching the market, checking that you meet the lenders criteria to find the best mortgage for your circumstance.
Can I get a mortgage if I have a low deposit as a first-time buyer?
Yes. In fact, most mortgages that accommodate low deposits are only available to first-time buyers. Having a low deposit isn’t a stumbling block.
Most first-time buyers do have low deposits. As with any mortgage, there will always be other criteria and limitations to navigate, which is where a broker can help you.
Can I get a mortgage with a low deposit if I have bad credit?
It would depend on the exact nature of the bad credit and when it happened. Having a good credit history is usually required for a mortgage with a low deposit, so it could be challenging.
Can you get a Buy to Let mortgage with a low deposit?
No, the minimum deposit for a Buy to Let mortgage is 15% – much higher than for a residential loan. That’s only available with a few lenders, and most Buy to Let mortgages require a 20% deposit or more.
Do you have any top tips for people with a low deposit?
It’s best to stay on top of your credit commitments in the year leading up to buying a property. Keep inside any overdraft facility, and also make sure you’re on the voter’s roll.
This will help your credit score when you apply for the mortgage.
Also, don’t forget to allow for the other costs of buying a property, such as solicitor’s fees, a survey on the property and perhaps stamp duty.
You’ve demonstrated how a mortgage broker can help – any final thoughts?
Talking to a mortgage broker is helpful because we take into account all the aspects of your case. Speaking to us early can prepare you for the purchase, confirming how much you need to save and other ways to help your case before you come to buy.
A broker will search the market to find the most suitable mortgage, potentially saving you time and money by getting you a competitive deal from one of the many lenders out there.
Key Takeaways:
- Mortgages are available for low deposits, with some lenders accepting as little as a 2% deposit or even requiring no deposit, pending other criteria.
- The amount you can borrow is directly related to your income, but options like buying jointly can help boost affordability.
- Specific low deposit schemes are available, such as Deposit Unlock for new builds and Shared Ownership, which allows you to purchase a proportion of the property.
- First-time buyers have an advantage, as most mortgages accommodating low deposits are only available to them.
- Using a mortgage broker is recommended as they can search the market for a suitable deal, save you time and money, and help you prepare for the purchase.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
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What you need to know…
The actual amount you can borrow will depend on your credit commitments, your regular monthly outgoings and how each lender assesses your income.
Lender’s affordability checks can differ meaning that the amount you can borrow may change from lender to lender. That’s where the expertise of our personal advisers comes in and where our independent status benefits you.
The minimum deposit required is 5% of the property purchase price. Most lenders will allow the deposit to come from a gift and some lenders will even consider this being raised via a personal loan. There are government incentives to help boost your savings if you are a first time buyer. Depending on your circumstance you may either need to have a larger deposit or will perhaps want to put a larger deposit down, due to preferable interest rates.
Because we are independent mortgage brokers we will be able to secure you the best deal for your circumstance.
An Agreement in Principle, also known as a ‘Decision in Principle’ will be provided after affordability and credit checks have been approved. An Agreement in Principle is extremely useful to increase your confidence when viewing and offering on properties. Estate Agents will typically want to see an Agreement in Principle before presenting your offer to the seller. Our personal advisers can help you with this.
It’s a requirement of your mortgage to have buildings insurance. This covers the bricks and mortar of the property.
It’s also a good idea to take advice from your personal adviser on protecting you and your loved ones if something bad happens. For example: Life Cover, Critical Illness Cover and Income Protection.
Being accepted for a mortgage does depend on your circumstances. We are experts with all types of mortgages…. We specialise in obtaining mortgages for the self-employed, contractors, construction industry scheme (CIS) workers and those with historic adverse credit (as well as employed people of course). In all these situations we can frequently secure high street deals. Being independent and experts is a real benefit in these circumstances.
Your monthly payments will vary depending to your chosen mortgage term, choice of mortgage product, how much deposit you have and repayment type. It is best to chat with a personal independent adviser to find out exactly what interest rate and term you can secure to give an accurate monthly payment.
Most of the first time buyers we have helped secure a mortgage are paying less on their mortgage than they used to pay on rent. This does, however, depend on circumstances. The mortgage term chosen is a major factor which can be dictated by your age and intended retirement age. Of course, it is also worth noting you are paying back the mortgage and once it is repaid you won’t have any rent to pay.
There are costs associated with purchasing your first home. You will need to pay legal fees and other potential costs include a survey fee, stamp duty (which is a property land tax) and administration fees. There are First Time Buyer government incentives on savings and stamp duty that can help you with raising the monies for a deposit, costs and reducing stamp duty. Our personal advisers can give guidance within a free consultation.