In fact, the UK government has launched several initiatives in recent years to help first-time buyers with smaller deposits get onto the property ladder.
It’s important to note that lenders will still need to conduct their ‘responsible affordability assessments’ to ensure that borrowers can ‘afford to repay the mortgage’.
Even if you can afford the monthly payment, lenders still need to factor in lots of other bits and bobs to show they’re being ‘responsible lenders’.
The interest rates on 95% mortgages are normally a fair bit higher than 90% mortgages and borrowers may need to pay mortgage insurance to protect the lender in case of default.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage. There may be a fee for mortgage advice. The actual amount you pay will depend on your circumstances. The fee is up to 1% but a typical fee is £495.