Angel Thomas
Principal Adviser, In2Equity Ltd
Five per cent deposit mortgages never went away entirely, but through 2024 and 2025 the market for them was thin and the rates punishing. That has changed. As of October 2026 several high-street lenders are competing on 95% LTV again, which is good news, with an honest caveat.
The caveat is the rate gap. Right now the difference between a 5% deposit deal and a 15% deposit deal is around 0.7% to 0.9%, wider than it has been in years. On a £250,000 mortgage that is roughly £110 a month, or £6,600 over a five-year fix.
Why the gap is wider
Lenders price 95% LTV for the risk of negative equity if prices dip. With house price growth modest and the base rate steady at 3.75%, lenders are protecting that lower-deposit book carefully. The cheaper deals are reserved for the 15% and 25% deposit tiers.
When a 5% deposit still wins
If the alternative is renting for another two years to build a bigger deposit, the maths often favours buying now. You start paying down the mortgage, you are in the market if prices rise, and you stop paying someone else's mortgage. The extra 0.7% costs less than two years of London rent.
When it does not
If you can reach 10% or 15% in a few months by saving, and prices are flat, waiting usually wins. You drop a rate tier, lower your monthly payment, and reduce the risk of being in negative equity if the market turns. We model both paths with real numbers before you commit.
The stress test on a 95%
Lenders stress a 95% LTV mortgage at the reverted rate, often around 8% to 9%. On a £237,500 loan (95% of £250,000) that stress payment is roughly £1,850 a month. If your disposable income does not support that, the 5% deal will not be offered even if the pay rate is affordable.
What we do
We compare 95% LTV deals across the whole market, show you the exact monthly cost and the stress test, and model whether reaching 10% or 15% in three to six months changes the deal meaningfully. Sometimes the answer is buy now, sometimes it is wait. We show you which.