How to Buy a Home With a 5% Deposit | Mortgage Market Update 02/10/20

Home Buying Mortgage Advice in Hull

The mortgage market has been heavily hit by the effects of the coronavirus and it’s still recovering. The whole economy has been affected; everyone has been impacted in some way or another. In the mortgage world, lenders are only really offering 90% mortgages (10% deposit), which can prove quite expensive, particularly to First Time Buyers.

There are ways however to get onto the property ladder with a 5% deposit. As an expert Mortgage Broker in Hull, we thought that it would be within your best interests to know how this can be achieved using the Help to Buy Equity Loan or the Shared Ownership scheme:

Help to Buy Equity Loan Mortgage Advice in Hull

With the Help to Buy Equity Loan, you can put down a deposit of 5% or more and then the government will top up this percentage so that you have a total of a 25% deposit. Whatever percentage that they loan you is the Equity Loan, which will also need to be paid off along with your mortgage. During the first 5 years of living in your house, this loan will be interest-free, however, if you don’t manage to pay it off within these five years, you will start receiving interest on it starting at 1.75%.

So it’s still possible to obtain a mortgage with a 5% deposit through the Help to Buy Equity Loan scheme. Now you know this, we bet you are wondering what the requirements are. To qualify for the Help to Buy Equity Loan scheme you need to know that:

  • You can only be buying a newly built property
  • The maximum purchase price is £600,000
  • This is the only property that you can own
  • You have to be buying the property for purely residential use only and not as a Buy to Let

Based on these requirements, do you think that the Help to Buy Equity Loan scheme is for you? If so, it could be the perfect time for you to jump start your Help to Buy mortgage journey. There are two ways you can go about doing this, one is by doing everything on your own, the other being approaching a Mortgage Broker in Hull. Getting Help to Buy Mortgage Advice in Hull could take all of the stress that comes with mortgages off your back. An Advisor will walk you through the whole process and tell you exactly what is going during every step of the way.

Shared Ownership

The Shared Ownership scheme can also help you get onto the property ladder with a 5% deposit. This scheme lets you purchase a percentage of your mortgage and then pay the rest on rent. This percentage is normally anywhere between 25%-75%. As you only own part of the property, you share the property with the government. The percentage that you own can be increased at a later date if you want to.

Like the Help to Buy Equity Loan scheme, you have to qualify for the Shared Ownership scheme and meet certain requirements. Here are the rules that you will need to adhere to in order to qualify:

  • You can’t have a household income of more than £80,000 per year
  • Can only access if you can’t get a mortgage any other way
  • You need a good credit history
  • You can only own this property

If you are struggling to obtain a normal mortgage, the Shared Ownership Scheme could be your best option. If you want Shared Ownership Mortgage Advice in Hull, you should approach a Mortgage Broker. They will tell you everything about the scheme and see if you qualify for it. Talking to a Mortgage Broker in Hull could be exactly what you need.


Even though your options may be limited when trying to get a mortgage with a 5% deposit, these two schemes could be great options to consider. Both schemes are still holding their weight in the mortgage market. Whether it’s the Help to Buy Equity Loan scheme or the Shared Ownership scheme, we can help with both. Firstly, we will check if you qualify for a scheme and whether it will suit your personal and financial circumstances or not. If everything looks good, we can get your mortgage journey started.

Getting Mortgage Advice in Hull could be within your best interests, especially in this day and age. The mortgage market is up in the air at the moment so getting advice will be extremely beneficial, especially if you are a First Time Buyer in Hull. Feel free to get in touch so we can discuss your mortgage options.

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