95 borrowing of home loans explained in practical terms

What 95% LTV means

In plain language, a 95% loan-to-value mortgage lets you buy with only a 5% deposit, stretching your budget without waiting years to save. Lenders still test affordability carefully, looking at income, expenses, debts, and credit history, and many cap the amount at a multiple of your verified earnings.

Who it suits

This route can suit first-time buyers and movers with strong income but limited savings. It may also help if your rent is close to the projected repayment, showing you can handle the cash flow. Expect tighter criteria and slightly higher rates than lower LTV options.

Key benefits and watch-outs

Pros include faster access to a home and the chance to build equity as you repay. However, costs are usually higher, fees can apply, and small price drops could create negative equity. Stress-test your budget and keep a buffer.

• Small deposit; faster entry to the market
• Higher monthly repayments and rate sensitivity
• Insurance or guarantor may be required in some cases
• Overpayment options help reduce balance sooner
• Plan to remortgage when your LTV improves