Saving a large deposit is one of the biggest hurdles to buying a home, but several options can help you buy with a small deposit. This guide explains low-deposit buying options: 95% mortgages, new-build and shared schemes, family help, boosting savings, and the trade-offs of buying with little deposit.

The challenge of a small deposit

A deposit is often the hardest part of buying, with many people able to afford mortgage payments but struggling to save a large lump sum. The good news is that several routes allow you to buy with as little as a 5% deposit, or with help from family or schemes. Knowing these options means a small deposit need not put ownership out of reach, though each has trade-offs.

95% mortgages and the guarantee scheme

The most direct option is a 95% mortgage, letting you buy with a 5% deposit, supported by the Mortgage Guarantee Scheme, as our guide to 95% mortgages explains. These are available on new and existing homes within the scheme's price cap. For buyers who can afford the payments but have only a small deposit, a 95% mortgage is often the simplest route onto the ladder.

New-build low-deposit schemes

For new-builds, Deposit Unlock and similar industry schemes let you buy with a 5% deposit on participating developments, and some builders offer deposit contributions or other incentives. These target buyers of new homes specifically. If you are open to a new-build, these schemes can provide a low-deposit route, so it is worth checking what is available on developments you are considering, alongside the broader guarantee scheme.

Shared ownership and Right to Buy

Shared ownership lets you buy a share with a deposit only on that share, lowering the upfront cost, while Right to Buy lets eligible council tenants use their discount as a deposit, as our guides to shared ownership and Right to Buy explain. These routes reduce or replace the deposit you need in different ways, helping buyers who cannot save a large sum get onto the ladder.

Family help

Family can help you buy with a small deposit, through a gifted deposit, or by acting as a guarantor or using a family-assist mortgage, as our guides to gifted deposits and guarantor mortgages explain. These use family support to boost your deposit or strengthen your application. For many buyers, family help is the deciding factor in buying sooner, so it is worth exploring if relatives are able and willing to assist.

Boosting your savings

You can also grow a small deposit faster using a Lifetime ISA's 25% government bonus, or other savings strategies, as our guide to the LISA versus the Help to Buy ISA explains. Boosting your savings increases your deposit over time, which can move you into better mortgage rates. Combining a boosted deposit with a scheme or family help can make buying with limited savings more achievable.

The trade-offs of a low deposit

Buying with a small deposit means a high loan-to-value mortgage, which carries a higher interest rate and a small equity buffer, with more risk of negative equity if prices fall, as our guide to the alternatives notes. So while low-deposit options help you buy sooner, they cost more monthly and carry more risk. Weighing buying now against saving a larger deposit for a better rate is part of the decision.

How much is a 5% deposit?

A 5% deposit varies a lot by price: on a £150,000 home it is £7,500, on a £250,000 home £12,500, and on a £350,000 home £17,500. Knowing the figure for the homes you are considering helps you set a realistic savings target, as our guide to deposits explains. Even a 5% deposit takes saving, so understanding the actual sum needed helps you plan your route to buying.

Saving versus buying now

A key decision is whether to buy now with a small deposit or wait and save a larger one. Buying sooner gets you on the ladder and stops rent, but a 95% mortgage costs more in interest; saving longer can secure a lower rate but means waiting and risking price rises. Weighing these, based on your circumstances and the market, helps you decide whether a low-deposit purchase now is the right move.

Affordability still matters

Whatever route you use, you must still pass the lender's affordability checks, since schemes help with the deposit but not the ability to repay, as our guide to what you can borrow explains. So a small deposit alone is not enough; the mortgage must be affordable. Ensuring you can comfortably afford the payments, including if rates rise, is essential before buying with any low-deposit option.

Building your credit

Lenders look at your credit history as well as your deposit, so building a good credit record improves your chances of approval and a decent rate, especially with a small deposit, as our guide to credit scores explains. Steps like being on the electoral roll, paying bills on time and managing existing credit well all help. Strengthening your credit alongside saving a deposit supports a successful low-deposit purchase.

Combining routes

You can often combine low-deposit routes, such as using a Lifetime ISA bonus and family help together to build your 5% deposit, then buying through the Mortgage Guarantee Scheme. Stacking the available support can make buying more achievable than relying on one route alone. Considering how the options fit together for your situation, ideally with a broker, helps you assemble the deposit and mortgage you need.

Getting advice

Because low-deposit buying involves schemes, family arrangements and high loan-to-value mortgages, each with rules and trade-offs, advice can be valuable. A mortgage broker can identify which options you qualify for, find suitable 95% deals, and help you combine routes, as our guide to the alternatives explains. Given the importance of getting your first purchase right, guidance on the best low-deposit route for your circumstances is well worth seeking.

Weighing it all up

Buying with a small deposit is achievable through several routes, but each has costs and trade-offs, particularly the higher rate and smaller buffer of a high loan-to-value mortgage. Weighing the benefit of buying sooner against saving a larger deposit, and choosing the routes that fit your circumstances, helps you make a sound decision. With the right approach, a small deposit need not stand in the way of owning a home.

With several routes available and the option to combine them, a small deposit is far from the barrier it once seemed, provided you go in understanding the higher cost of a high loan-to-value mortgage and have made sure the payments are comfortably affordable.

In short

Low-deposit options include 95% mortgages via the Mortgage Guarantee Scheme, new-build schemes like Deposit Unlock, shared ownership, Right to Buy for council tenants, family help such as gifted deposits or guarantors, and boosting savings with a Lifetime ISA. These let you buy with as little as a 5% deposit or with support. But a small deposit means a higher rate and less buffer, so weigh buying sooner against saving more.

Where to get help and next steps

Read our guides to 95% mortgages, the Mortgage Guarantee Scheme, Right to Buy, and Help to Buy alternatives. This is general information, not mortgage or financial advice; scheme rules change, so check current details.