First-Time Buyer Mortgages: Could You Buy With £5,000, 2% or No Deposit?
- Lauren Drake
- 3 hours ago
- 5 min read
If you're trying to buy your first home, you may have assumed that you need to save a 5% or 10% deposit before it's worth speaking to a mortgage adviser.
That isn't necessarily the case.
There are now several low-deposit mortgage options available to eligible first-time buyers. These options may be relevant to people who can afford monthly mortgage repayments but are finding it difficult to build a larger deposit while also paying rent and everyday living costs.
Depending on your circumstances, there are now mortgages available with 2% deposits, fixed £5,000 deposits and even, in some cases, no traditional deposit at all.
So, if your deposit is the main thing holding you back, you may be closer to buying your first home than you think.
What is a 98% mortgage?
A 98% loan-to-value (LTV) mortgage allows you to borrow up to 98% of the value of the property, leaving you to provide the remaining 2% as your deposit.
For example, on a £300,000 property:
10% deposit = £30,000
5% deposit = £15,000
2% deposit = £6,000
For someone paying rent while trying to save, that difference could potentially bring buying a home within reach much sooner.
These mortgages aren't available to everyone, and lenders have different rules around income, affordability, credit history, property type and maximum purchase price. But if you've already saved a few thousand pounds, it's worth checking what options may be available before assuming you need significantly more.
What is a £5,000 deposit mortgage?
Some mortgages work slightly differently by asking for a fixed minimum cash deposit, rather than simply requiring you to put down 5% or 10% of the purchase price.
That means an eligible first-time buyer may potentially be able to purchase a property using a deposit starting from around £5,000, subject to the lender's individual criteria.
Because the deposit is a fixed amount rather than a percentage, the amount you need to save may be lower than with some percentage-based deposit options, depending on the purchase price and lender criteria. However, these mortgages can come with restrictions around the property's value, the source of the deposit and the type of property being purchased.
Can you really get a mortgage with no deposit?
In some circumstances, yes.
100% mortgages have returned to the market, allowing eligible borrowers to purchase without providing a traditional cash deposit.
There are several different ways these mortgages can work.
Using your rental payment history
Some 100% mortgage options are designed for people who have been renting consistently but haven't been able to build a large deposit.
The principle is fairly simple: if you've demonstrated that you can reliably make rental payments each month, a lender may take that history into account when considering how much mortgage payment you could afford. Usually a minimum of 12 months' rental history will need to be evidenced.
You'll still need to meet affordability, credit and property criteria, so having a strong rental history doesn't automatically mean you'll qualify.
But it does mean that renters who feel trapped between paying rent and trying to save a deposit could have another route to explore.
Mortgages with family support
There are also mortgage options that allow parents or other family members to help without necessarily giving the buyer a large cash deposit.
Depending on the arrangement, family support might involve:
joining the mortgage without jointly owning the property
using savings as additional security
using equity in another property as security
contributing towards a smaller deposit.
These arrangements can involve financial and legal responsibilities for the family member providing support, so it's important that everyone understands exactly what they're agreeing to. Independent legal advice may also be required.
Is it still a good idea for first-time buyers to have a 5% or 10% deposit?
For some buyers, waiting and building a larger deposit will still make good financial sense. A bigger deposit can potentially provide access to a wider choice of mortgages, lower interest rates and smaller monthly repayments.
But there's a big difference between choosing to save a larger deposit and assuming you have to.
If you've already saved £5,000, have a small percentage deposit or have been reliably paying rent each month, it could be worth finding out what's possible now.
What's the downside of a very small deposit?
Low and no-deposit mortgages won't be suitable for everyone.
When you're borrowing a very high proportion of the property's value, there are some additional things to consider.
Interest rates may be higher
Generally, mortgages with smaller deposits can have higher interest rates than those available to borrowers with more equity.
You have less equity from the start
If property prices fall after you buy, there is a greater risk that you could owe close to, or potentially more than, the property is worth.
This is known as negative equity and could make selling or remortgaging more difficult.
Lending criteria can be more restrictive
Depending on the mortgage, there may be additional restrictions around things such as:
property type
flats and new-build homes
maximum purchase price
income and affordability
credit history
gifted deposits
employment status
mortgage term.
This is one reason why comparing the different options with your Delta mortgage adviser can be particularly important when you're buying with a small deposit.
Don't forget the other costs of buying
Even if you qualify for a mortgage requiring little or no deposit, you'll normally still need some savings available for the other costs involved in buying a property.
These can include:
solicitors' fees
searches
surveys or valuations
removal costs
insurance
any applicable Stamp Duty Land Tax (you can calculate what you’d be due to pay for a property in England or NI on the Gov.uk website: HMRC Stamp Duty Land Tax Calculator)
So, a 100% mortgage doesn't necessarily mean you can buy a property with zero savings.
A small deposit doesn't mean affordability doesn't matter
Whether you're looking at a 98%, £5,000 deposit or 100% mortgage, lenders will still need to establish that the borrowing is affordable.
They'll usually consider factors including your:
income
regular expenditure
existing debts and financial commitments
credit history
mortgage term
property purchase price.
Someone could have very little deposit but plenty of income. Another buyer could have built a good deposit but find that affordability limits how much they can borrow.
It's the combination of the two that matters.
You may be closer to buying than you think
If you've been putting off speaking to a mortgage adviser because you don't think you've saved enough yet, it may be worth checking before you carry on saving.
At Delta Mortgages, we can look at your circumstances and help you understand what low-deposit mortgage options may be available.
We'll consider things such as your:
current savings
income and affordability
credit profile
rental history
preferred property price
employment
potential family support;
and explain the different routes you could consider.
You may decide that continuing to save for a larger deposit is the right option.
But you could also discover that you're already in a position to start looking for your first home.
Got £5,000 saved, a 2% deposit, or a strong history of paying your rent?
Get in touch with Delta Mortgages and find out how close you could be to buying your first home.
Information about mortgage availability and deposit requirements was checked on 24 August 2026. Mortgage products and lending criteria can change or be withdrawn at any time. Mortgage availability is subject to individual circumstances, affordability, credit assessment and lender and property criteria. This article is for information only and does not constitute advice. Delta Mortgages is not responsible for the accuracy of the information contained within the linked site(s) accessible from this page.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Author: Lauren Drake, Mortgage & Protection Adviser - August 2026
