Deposit Unlock is an industry scheme that helps people buy a new-build home with just a 5% deposit. This guide explains Deposit Unlock: what it is, how it works, who it is for, how it compares with the Mortgage Guarantee Scheme, and the pros and cons of using it to buy a new-build with a small deposit.
What Deposit Unlock is
Deposit Unlock is a scheme, backed by the housebuilding industry and lenders rather than the government, that lets you buy a new-build home with a 5% deposit. It was developed to make low-deposit mortgages more available on new-builds, which lenders have sometimes treated cautiously. It is available on participating developments from builders who offer it, helping buyers who cannot save a larger deposit purchase a new home.
How it works
Under Deposit Unlock, the housebuilder provides insurance that protects the lender against losses, reducing the lender's risk and allowing them to offer a 95% mortgage on the new-build. You apply for a Deposit Unlock mortgage with a participating lender on a participating development. Like the Mortgage Guarantee Scheme, the protection works in the background, so you simply buy the home with a 5% deposit and a normal mortgage.
Who it is for
Deposit Unlock is open to both first-time buyers and home movers buying a new-build on a participating development, provided they meet the lender's criteria. So it is not limited to first-time buyers. If you want to buy a new-build but can only manage a 5% deposit, Deposit Unlock can be an option, as long as the developer and a lender offer it on the home you want.
Participating developments only
A key point is that Deposit Unlock is only available on developments from housebuilders who participate in the scheme, and through lenders who offer it. So it is not available on every new-build or from every lender. Before relying on Deposit Unlock, it is important to check that the development you are interested in offers it, as availability depends on the builder and lender taking part.
Deposit Unlock versus the Mortgage Guarantee Scheme
Both Deposit Unlock and the Mortgage Guarantee Scheme let you buy with a 5% deposit, but they differ: Deposit Unlock is industry-backed and specific to new-builds on participating developments, while the Mortgage Guarantee Scheme is government-backed and broader, covering new and existing homes up to £600,000. Comparing the two, and which is available on the home you want, helps you choose the best low-deposit route for your purchase.
New-build considerations
Because Deposit Unlock is for new-builds, the usual new-build considerations apply: new homes can carry a price premium, valuations matter, and incentives are sometimes offered, as our guide to new-build mortgages explains. Buying a new-build with a small deposit means little equity buffer, so it is worth understanding how new-build values can behave. These factors are part of weighing up a Deposit Unlock purchase.
The pros and cons
The main advantage of Deposit Unlock is buying a new-build with just a 5% deposit, helping those who cannot save more. The drawbacks are the same as any high loan-to-value purchase, higher rates and less equity buffer, plus limited availability to participating new-build developments. Weighing the chance to buy sooner against the cost of a 95% mortgage, and checking availability, helps you decide if Deposit Unlock suits you.
An example of buying with Deposit Unlock
Suppose you want a new-build flat priced at £220,000 on a participating development. With Deposit Unlock, a 5% deposit would be £11,000, and you would take a 95% mortgage of £209,000. The builder's insurance protects the lender, enabling the 95% deal. As with any low-deposit purchase, you would need to afford the mortgage, but the 5% deposit makes buying the new-build more achievable.
Finding a participating development
Because Deposit Unlock is only available on developments from participating builders, finding a suitable new home means checking which developments offer it. Housebuilders that take part can tell you, and a broker may know which developments and lenders are involved. Confirming availability early avoids planning around Deposit Unlock only to find the home you want does not offer it, as availability depends on the builder and lender taking part.
New-build valuations
New-build homes can sometimes be valued cautiously or carry a price premium over similar older homes, which matters more with a small deposit and little equity buffer, as our guide to new-build mortgages explains. If a new-build's value does not rise as hoped, a high loan-to-value buyer has less cushion. Understanding how new-build values can behave is part of weighing a Deposit Unlock purchase sensibly.
Deposit Unlock versus Help to Buy
Deposit Unlock is sometimes seen as a successor to Help to Buy for new-builds, but it works differently: Help to Buy was a government equity loan that reduced your mortgage, while Deposit Unlock simply enables a 95% mortgage with a 5% deposit, with no equity loan to repay. So with Deposit Unlock you borrow the full 95% yourself, rather than sharing the cost with a government loan.
The rate you might pay
As a 95% mortgage, a Deposit Unlock deal usually comes at a higher interest rate than larger-deposit mortgages, reflecting the higher loan-to-value, as our guide to loan-to-value explains. So while the 5% deposit helps you buy sooner, the monthly cost is higher than with a bigger deposit. Comparing the available Deposit Unlock rates, and weighing them against saving a larger deposit, helps you judge whether it suits you.
Is Deposit Unlock right for you?
Deposit Unlock can suit buyers who want a new-build, can only manage a 5% deposit, and find a participating development offering it. It suits less well those buying older homes, where the broader Mortgage Guarantee Scheme may fit better, or those who can save a larger deposit for a lower rate. Weighing the chance to buy a new-build sooner against the higher cost of a 95% mortgage helps you decide if it is right.
Always check availability and rules
Because Deposit Unlock depends on participating builders and lenders, and industry schemes can change, it is important to check the current availability and terms on the development you are interested in before relying on it, as our guide to government schemes notes. Confirming with the developer and a broker that Deposit Unlock is offered, and on what terms, ensures your plans are based on what is actually available.
For the right buyer set on a new-build with only a 5% deposit to hand, Deposit Unlock can open the door to a home that might otherwise be out of reach, as long as the development takes part and the higher cost of a 95% mortgage is something you can comfortably manage.
In short
Deposit Unlock is an industry-backed scheme letting you buy a new-build home with a 5% deposit, using builder-provided insurance to encourage lenders to offer 95% mortgages. It is open to first-time buyers and movers, but only on participating developments and through lenders that offer it. It is similar to the Mortgage Guarantee Scheme but specific to new-builds. As with any 95% mortgage, rates are higher and the equity buffer small.
Where to get help and next steps
Read our guides to the Mortgage Guarantee Scheme, new-build mortgages, and government schemes overview. This is general information, not mortgage or financial advice; scheme rules change, so check current details.