Mortgage Guarantee Scheme

If saving for a house deposit is proving difficult, the mortgage guarantee scheme could help make home ownership more accessible. In this guide, we explain how the scheme works, which lenders currently support it, and the eligibility criteria you will need to meet. We also outline how much you may be able to borrow under the scheme, along with alternative low-deposit mortgage options worth considering.

What is the mortgage guarantee scheme?

The mortgage guarantee scheme is a government-backed initiative designed to help more people purchase a home with just a 5% deposit. Through the scheme, lenders are encouraged to offer 95% loan-to-value (LTV) mortgages, with the government providing a partial guarantee to cover potential losses if the property is repossessed.

The scheme was first introduced in April 2021 to stimulate the housing market and improve access to mortgages for buyers with smaller deposits. It has since been extended several times, and in July 2025 the UK Labour Government made the scheme permanent across England, Wales, Scotland and Northern Ireland.

Mortgage guarantee scheme eligibility

To qualify for the mortgage guarantee scheme, you must meet the following key criteria:

• Residential property only – The scheme cannot be used for buy-to-let or second homes.

• Individual or joint applications – Purchases must be made by individuals, not through a company.

• Property value – The home must cost £600,000 or less.

• Deposit – You will need a deposit of at least 5%.

• Mortgage type – Only repayment mortgages are permitted; interest-only products are excluded.

• Loan-to-value (LTV) – The mortgage must fall between 91% and 95% LTV.

• Affordability and credit checks – You must pass the lender’s standard affordability and credit assessments.

• Who can apply – The scheme is open to both first-time buyers and existing homeowners, subject to each lender’s additional criteria.

Which mortgage lenders support the scheme?

Several mainstream mortgage lenders in the UK have signed up to the mortgage guarantee scheme. Availability can vary, but some of the key providers currently offering 95% mortgages under the scheme include:

• Barclays – Supports the scheme for residential purchases up to £570,000 for houses and £275,000 for flats. Only repayment mortgages are available, and new build properties are excluded.

• NatWest – Offers 95% mortgages under the scheme for both first-time buyers and home movers. Properties must be valued at £600,000 or less, and new builds are not eligible.

• Lloyds Bank – Provides a range of fixed-rate products under the scheme. Interest rates may be higher with a 5% deposit. New build houses and bungalows are permitted, but new build flats are excluded.

• Halifax – Offers 95% LTV mortgages for first-time buyers and home movers, provided the property will be your only residence. New build flats are excluded, and the scheme cannot be combined with other government initiatives.

How to apply for the mortgage guarantee scheme

You do not need to apply to the scheme directly – everything is handled by the lender behind the scenes when you take out your mortgage. If your application meets the criteria and your chosen lender participates in the scheme, you may be able to secure a mortgage with just a 5% deposit.

Here is what the typical process looks like:

1. Work out your budget and deposit size – You will need a minimum 5% deposit.
2. Check your credit report and prepare documents – Gather proof of ID, payslips, and recent bank statements.
3. Speak with a mortgage adviser – An adviser can match you with a suitable lender that supports the scheme.
4. Compare mortgage rates – Review the available products and choose a deal that best fits your needs.

You can compare rates online with us for free below if you are confident doing so, but speaking with an adviser is the best way to ensure you are matched with a lender that supports the scheme and offers the most competitive deal.

How much can you borrow?

The amount you can borrow under the mortgage guarantee scheme depends on how each lender assesses affordability. This is typically based on a combination of factors, including:

• Income and employment – Your salary, type of employment, and the property you are buying.

• Deposit size – A minimum of 5% of the purchase price is required.

• Loan-to-value (LTV) – The resulting LTV once your deposit is applied.

• Income multiples – Most lenders will offer between 4 and 4.5 times your annual income.

• Credit history and commitments – Your credit record, along with any debts, financial obligations, or dependants, will also be considered.

Every lender applies these criteria differently, so speaking with a mortgage adviser is the best way to understand how much you could realistically borrow in your specific circumstances.

Alternative ways to get a low deposit mortgage

If you only have a small amount of savings, it may still be possible to secure a mortgage without relying on the government’s guarantee scheme. Alternatives to consider include:

• Family-assisted mortgages – Products such as guarantor mortgages, family boost mortgages or springboard mortgages allow relatives to help you onto the property ladder.

• Gifted deposits – A financial gift from family, friends or another party can provide an immediate boost to your deposit.

• Shared ownership schemes – These allow you to buy a percentage of the property and pay rent on the remainder.

• Key worker and profession-specific schemes – Initiatives such as the First Homes scheme or Forces Help to Buy (FHTB) offer discounts or support for certain groups.

• Professional mortgages – Certain careers, such as doctors or nurses, may be eligible for specialist mortgage deals.

• New-build developer incentives – Some developers offer 5% deposit matches or tailored mortgage deals to help buyers purchase their homes.

An experienced mortgage adviser can review your circumstances and guide you through all the options available, helping you decide whether the mortgage guarantee scheme or an alternative route is the best fit.

Frequently Asked Questions