What is a 95% mortgage?
A 95% mortgage is a home loan where you borrow 95% of the property’s value and provide a deposit of 5%. This ratio is known as loan-to-value (LTV).
Example
Purchase price: £100,000
Deposit (5%): £5,000
Mortgage required: £95,000
Why LTV matters
The higher the LTV, the greater the risk to the lender. Higher LTV mortgages typically come with stricter criteria and higher interest rates.
Who are 95% mortgages suitable for?
95% mortgages are most commonly used by first-time buyers who have reliable income but have found it difficult to save a larger deposit — often due to rising property prices and rent costs.
- Buyers with stable employment and provable income
- Applicants with a clean or well-managed credit history
- Those who want to buy sooner rather than delay while saving a larger deposit
In some cases, buyers with a larger deposit may still choose a 95% mortgage to keep cash available for other costs associated with buying a home.
What other costs should you consider?
A common mistake is using all available savings as a deposit. Buying a home comes with additional costs, and having accessible cash can reduce financial pressure during the first few months.
- Solicitor and conveyancing fees
- Survey or valuation costs
- Moving expenses
- Initial repairs, furnishings, and appliances
- Buildings and contents insurance
Who offers 95% mortgages in Northern Ireland?
After the financial crisis, 95% mortgages became far less common. Over time, they have returned to the market, and many mainstream banks and building societies now offer them again — although availability can change.
Each lender applies its own rules. Some may restrict certain property types, such as new builds or apartments, when lending at 95% LTV.
Lender criteria varies
Just because a lender offers a 95% product doesn’t mean every applicant or property will qualify. The detail matters.
The value of broker advice
A mortgage broker can identify which lenders are most likely to accept your application, helping you avoid unnecessary declines.
What are the lending criteria for a 95% mortgage?
Because a 95% mortgage represents a higher risk to the lender, affordability and credit checks are often more detailed than for lower LTV mortgages.
Income and affordability
Lenders assess whether your income comfortably supports the repayments after all committed expenditure is considered. Applications are often stress-tested to assess how repayments would be affected if interest rates rise.
Credit history
A clean credit record improves choice, but minor issues don’t always mean an automatic decline. The impact depends on what happened, how recently, and which lender is approached.
- Stable employment generally improves lender choice
- Lower existing debt can increase borrowing potential
- Some properties are harder to mortgage at 95% LTV
What are the downsides of a 95% mortgage?
While a 95% mortgage can help you buy sooner, there are trade-offs to be aware of.
Higher interest rates
Rates are typically higher than those available with larger deposits, resulting in higher monthly repayments.
Limited equity buffer
With only 5% equity, a fall in property values could leave you close to negative equity, which can restrict remortgaging options when your deal ends.
Can you remortgage after starting on 95%?
In many cases, yes. As you repay the mortgage and your balance reduces, your loan-to-value may improve. Even moving from 95% to 90% LTV can unlock better rates and more lender options.
- Review your options before your fixed rate ends
- Avoid falling onto a lender’s standard variable rate (SVR)
- Plan ahead to improve your remortgage position
Next step: check if a 95% mortgage is achievable
The best way to know whether a 95% mortgage is realistic is to review your income, outgoings, credit history, and deposit position together.
We’ll explain your options clearly and point you towards lenders most likely to accept your application — with free, no-obligation advice.