A large deposit isn't the only route into homeownership, though it's worth understanding upfront that low-deposit mortgages generally come with higher interest rates and more limited lender choice, reflecting the higher risk to the lender. Here's an honest comparison of the main options.
Standard low-deposit mortgages (5-10% deposit)
A growing number of mainstream lenders offer mortgages at 90-95% loan-to-value, meaning a deposit of just 5-10% of the purchase price. Rates at this LTV band are typically noticeably higher than at 75% or below, reflecting the greater risk, so it's worth checking whether saving even a little more to cross into a lower LTV band would unlock meaningfully better pricing.
Mortgage Guarantee Scheme-backed deals
Government-backed guarantee schemes have historically supported the availability of 95% mortgages by giving participating lenders some protection against losses, helping sustain low-deposit lending even during periods when lenders might otherwise pull back from the higher-risk end of the market.
Shared Ownership
Allows you to buy a percentage share of a property (commonly starting around 10-25%) and pay rent on the remaining share, with the option to buy further shares (known as "staircasing") over time. This can significantly reduce the deposit needed, since it's calculated only against your initial share, but comes with its own ongoing costs and lease considerations worth researching thoroughly first.
Guarantor and family-assisted mortgages
Some lenders offer mortgages where a family member acts as guarantor, or provides security against their own property or savings, reducing or removing the deposit requirement for the buyer. This can be a genuine route to ownership, but places real financial risk on the family member involved, and should be entered into with full understanding on both sides.
Gifted deposits
A family member gifting some or all of a deposit remains one of the most common ways UK first-time buyers reach a workable deposit size. Lenders require a signed letter confirming the gift doesn't need to be repaid and isn't a loan, since undisclosed loans can affect affordability assessments.
| Option | Typical deposit needed | Key consideration |
|---|---|---|
| Standard low-deposit mortgage | 5-10% | Higher rate than larger deposits |
| Mortgage Guarantee Scheme deal | 5% | Availability depends on participating lenders |
| Shared Ownership | Deposit on your share only | Ongoing rent on remaining share |
| Guarantor mortgage | Can be reduced or removed | Real risk to the guarantor |
| Gifted deposit | Depends on gift size | Requires signed gift letter |
Worth reading next: our guide on How Much Deposit Do You Need for a UK Mortgage?, and How to Compare the Best Mortgages for First-Time Buyers.
The bottom line
Several genuine low-deposit routes exist beyond simply saving longer, each with different trade-offs around cost, risk and flexibility. Compare the total cost and real risks of each option against your own circumstances, rather than assuming the lowest deposit requirement is automatically the best choice.