Raising the deposit to purchase a home or property is one of the biggest obstacles facing would-be buyers.
Yet, whilst it's more difficult if you're self-employed, there are lenders who'll consider lending at 95% loan-to-value if you have two or more years trading history.
Read on to learn more about the options for getting a self-employed mortgage with 5% deposit.
- Can I get a 5% deposit mortgage if I'm self-employed?
- Is it possible to get a 95% LTV mortgage with just one year's accounts?
- What factors determine how much deposit I'll need to get a mortgage?
- What government-backed mortgage schemes are available?
- What's the difference between the Mortgage Guarantee Scheme and the Help To Buy: Equity Loan Scheme?
- What are the pros and cons of a 5% deposit mortgage?
Can I get a 5% deposit mortgage if I'm self-employed?
Yes, it's possible, but certainly more difficult since interest rates started rising in December 2021.
So, for example, at 95% LTV, a £250,000 property purchase would require you to put down a minimum deposit of £12,500.
And whilst that's not an insignificant sum to find, there are options available if you're struggling to raise enough deposit.
But more on that in a minute.
Is it possible to get a 95% LTV mortgage with just one year's accounts?
It's possible but very difficult. In most cases, the answer is likely to be no. With interest rates much higher than they were, lenders are more cautious in their lending, and most lenders will require two years accounts or tax calculations to consider a 95% mortgage.
For flat, maisonette or apartment purchases, providers usually require a larger deposit of 10-20%.
That's because leasehold tenure is viewed as inherently riskier by lenders because the property value can decrease if the duration of the lease falls below 80-85 years.