Put simply, a 95% mortgage allows you to borrow up to 95% of the value of the property you want to purchase, which is really useful if you are buying your first home.
So with a 95% mortgage the Loan to Value refers to the ratio of how much your mortgage is worth against the value of the property you wish to purchase, shown as a percentage.
For example: if you were buying a property costing £150,000 and putting in a deposit of £7,500, your Loan to Value would be 95% and your deposit would be 5%.
(5% of the property value)
(95% of the property value)
First things first, you should refer to our borrowing calculator to get an idea of how much you would be able to borrow taking into consideration your income (and the income of any joint applicant) and your monthly outgoings. When we look at how much we can lend, we base the amount on:
When you have an idea of how much you can borrow, you can also look up potential mortgage repayment amounts with our repayment calculator . By entering your deposit amount and the purchase price of the new property, we’ll show how much your repayments could be (note, this will vary depending on the mortgage deal you eventually choose).
It’s also important that you have a good credit record before applying – you can check this on sites like Equifax or Experian. You should also ensure that you are registered on the electoral roll at your current address.
To help you work out what information we require, why not look up our mortgage lending criteria which details how we decide who to lend to.
Many first time buyers are tempted by 95% mortgages, mainly due to the fact that the deposit is smaller, although our 95% mortgages are also available to home movers.
You could borrow between £50,000 and £500,000 (subject to our lending criteria), but it's worth considering that your mortgage repayments on a 95% mortgage may be larger than on a mortgage with a lower loan-to-value.
Depending on your circumstances you may find it more beneficial to wait and save for a larger deposit in order to get a more competitive mortgage deal. The lower the interest rate on your mortgage, the lower your repayments may be.
You also should consider other mortgage costs that you’ll need to pay in addition to your monthly mortgage repayment and deposit. These costs have to be paid upfront when you apply, although it is possible on some mortgage deals to add the product fee to the cost of your mortgage loan. These costs include:
Get a lending decision online. Based on the details you provide, we’ll be able to let you know straight away whether we can offer you a mortgage, and if so for how much.
Takes approximately 10 minutes to complete
Once you've obtained a lending decision and have found the right mortgage deal, complete your mortgage application.
If you feel you need advice on your application, you can speak to a friendly mortgage advisor in branch or over the phone - just give them your application number from your online lending decision. Alternatively you can continue with your application online without receiving advice.
Takes approximately 15 minutes to complete
Speak to one of our friendly mortgage advisers about your options