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Why Choose Us

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5-star reviews on Google
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years we have been as independent mortgage and protection brokers
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customer satisfaction for finding the best deals on the UK market
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total donated to various charities

Why Choose Ascot Mortgages

0 %
5-star reviews on Google
£ 0
total donated to various charities
0
years we have been as independent mortgage and protection brokers
0 %
customer satisfaction for finding the best deals on the UK market

In the ever-evolving landscape of the UK mortgage market, 95% mortgages have become a prominent fixture, providing prospective homebuyers with the opportunity to step onto the property ladder with just a 5% deposit. With money being a crucial factor, in this guide, we will delve deep into the nuances of 95% mortgages, exploring its advantages, disadvantages, and how to select the right deal that suits your financial standing and home-owning aspirations.

What Our Clients Say About Us

5.0 Based on 142 reviews from review us onAreti D. ★★★★★ Absolutely thrilled with the exceptional service provided by Ascot Mortgages Ltd and especially by Natalia Barry! Even though our home purchase hasn't been completed yet, we couldn't wait to share our positive experience. From the moment we reached out, their professionalism and expertise shone through, making the daunting process of securing a mortgage a breeze.Not only did Natalia navigate the intricacies of the mortgage market with finesse, but they went above and beyond by suggesting other high-quality services, including solicitors and insurance providers. This comprehensive approach is making the entire home-buying journey seamless and stress-free.Natalia took the time to understand our unique needs and financial situation, ensuring that the options presented were tailored perfectly.Communication is prompt and clear throughout, leaving us feeling informed and confident at every stage. Natalia had our best interests at heart, going the extra mile to secure a fantastic mortgage deal.We cannot recommend Ascot Mortgages and Natalia highly enough. If you're in need of mortgage assistance, look no further. With their expertise and dedication to client satisfaction, you're in the best hands possible. A huge thank you to Natalia for making our home-buying experience a dream come true!Ashley Cox 1. ★★★★★ Would 100% recommend. Myself and my partner are currently going through the mortgage process as first time buyers. Natalia Barry has dealt with our application from day one. She has always been on hand to help, informative throughout and reliable when we have had questions. She has given us several options and broken them down into simple terms to help us. Natalia has truly been exceptional who deserves every bit of credit. We certainly got lucky having her as our first mortgage consultant.Dominik S. ★★★★★ Alison and the Ascot Team are excellent. I have used them for 5 years now and they deliver the most competitive mortgage deals fast. Just what I need. Thank you!Eric T. ★★★★★ We have dealt with Ascot Mortgages twice. Once for a mortgage about eleven years ago and recently for life insurance.In both cases we were treated with the utmost respect and professionalism.In the case of the life insurance application, we considered ourselves to be problem customers because of our age and numerous health issues.Richard Johnson, who managed this application couldn't have been more helpful.He worked in our best interest and was dedicated to providing an excellent service.We were kept up to date through all of the stages of the application and when our doctors were very slow in producing medical reports for the insurance company he persisted where others might have given up.The service we had from Richard was pleasant and professional throughout some difficult stages.My wife and I have no hesitation in recommending Ascot Mortgages.Zack R. ★★★★★ Having dealt with Ascot Mortgages and Alison for many years now I can say that you wont find a more professional, knowledgeable and efficient company to help with your mortgage. Alison is patient and makes the whole process seem easy. She has the answer to any question you have and seems to genuinely care. I can not recommend enough. I am sure I will be using Ascot Mortgages for years to come.Umair Z. ★★★★★ It has been a fantastic experience to work with both Phil and Jardelle at Ascot Mortgages to secure a mortgage product for my first home. Phil made the mortgage process smooth and easy. They are professionals and know what they are doing. Very pleased with the service and communication. would highly recommend them.Hello at NLP West M. ★★★★★ I needed a buy to let re-mortgage. Ascot were efficient from start to finish. I can recommend them completely especially because they can search the whole spectrum of mortgage lenders and meet the clients needs. never waiting for staff to get back and always kept me in the loop.Onohomen O. ★★★★★ ZHOU J. ★★★★★ It has been a brilliant experience to work with both Phil and Jardelle at Ascot Mortgages to secure a great mortgage product for our next home. Given how challenging the current market is, they have done a fantastic job to meet our needs with their expertise, professionalism and effectiveness. We would highly recommend their services to whom seeks help with their property purchase.Nicholas S. ★★★★★ Fantastic service. Ellie and Jardelle were always quick to reply to any queries and very helpful throughout the process. Highly recommend!Stacey S. ★★★★★ Jason was brilliant to work with! Always on top of the transaction! Would highly recommend 👍Scott ★★★★★ Although I've not bought anything yet, they (Jason in particular) have been super helpful in my search for the right mortgage deal, whilst also giving an honest opinion during these difficult times. Would highly recommend.Sandra I. ★★★★★ Fantastic from start to finish! Natalia and Jason found me the best rate for my remortgage and they were extremely efficient! Best service I’ve ever received from a brokerage company. Thanks so much.Virmantas N. ★★★★★ Amazing service and great communication. Ellie Morgan had quickly completed all requests and over delivered all expectations.Highly recommended for those who want to get the stuff done without any delays!David W. ★★★★★ I have used ascot for 3 renewals since they done helped me with my purchase which was complicated and will continue to use them going forward. Very fair prices and very helpful and knowledgeable even with just general information.Adam B. ★★★★★ Natalia made life very easy for us when remortgaging. Third time using ascot always a breezeTaff G. ★★★★★ Ascot Mortgages have been brilliant. Easy to work with and incredibly helpful. I am always happy to recommend them. Natalia and Jason have made the whole process much easier than I was expecting. Excellent service.Daryl L. ★★★★★ We've had a fantastic experience with Natalia Barry and Jason Jones at Ascot Mortgages for our property purchases and refinancing. Their expertise, coupled with genuine care and understanding of our needs, made the process smooth and stress-free.They were consistently communicative, keeping us informed at every step. Their assistance in consolidating our protection cover was invaluable, simplifying what could have been a complex process.What set them apart was their personal touch – always polite and ready to pick up the phone for a chat. This level of personal engagement is rare and much appreciated.In short, Natalia and Jason are not just skilled professionals but also truly dedicated to their clients. We highly recommend their services to anyone in need of mortgage advice.Sarah A. ★★★★★ I have used this firm for several years and they have always been super helpful and supportive, attentive and resolved issues in really useful ways. Shout out to Alison, Ellie and Jardelle (and the team!)Georgia W. ★★★★★ We worked with Ellie to secure our mortgage and protection, and she was a dream! Being a first time buyer, I was quite clueless about the process, and in a time where mortgage rates have been quite high, she worked right til the end to make sure we were getting our mortgage at the best possible rate and was always available to answer all questions I had. Can't recommend enough 🙂Richard D. ★★★★★ Laura S. ★★★★★ As a first time buyer, trying to navigate through potential mortgages was a very daunting thought. Ascot Mortgages were recommended to me and I've been extremely happy with the service provided. They have guided me through every step and I finally have a mortgage. Very pleased and would recommend.Lucy B. ★★★★★ Having Phil as my mortgage advisor was great from the very start! He is down to earth and speaking to him was always a pleasure. The kindness, compassion and support I have been given all the way through what can be a stressful process was immeasurable. Phil and Jardelle worked as a solid team and was able to make me feel at ease all the way through buying my first home. The team were always available and the communication between everyone was always clear and I felt safe in the hands of the company as a whole. Thank you for helping me buy my first home!Flora R. ★★★★★ I worked with Richard (Protection Adviser) for a couple of days to sort out life and critical illness insurance. Absolutely brilliant, he found me and my husband the perfect policy. Very knowledgeable and easy to get on, he definetely makes things easy to understand. Thank you for the great service provided.Matthew R. ★★★★★ I've dealt with Phil at Ascot Mortgages for a while now and Phil always comes back back to me with the right plan.Keep the good work up!js_loader

Written by:

Alison Gibson

Ascot Mortgage Expert

Last Updated:

07.02.2024

Written by:

Alison Gibson

Ascot Mortgage Expert

Last Updated:

07.02.2024

What are 95% Mortgages?

At its core, a 95% mortgage refers to a loan arrangement where you borrow 95% of the property’s price and pay a deposit of 5%. The ltv or loan-to-value percentage stands at 95%, meaning the lender fronts a substantial portion of the house price, leveraging a higher percentage of the property value compared to other mortgage types. Here, financial institutions play a vital role in making home ownership possible with less money down. Let us break down the fundamental components of a 95% mortgage:

  1. Loan-to-Value (LTV): The LTV represents the percentage of the property’s value that you are borrowing. A 95% LTV mortgage translates to a loan covering 95% of the home’s value, with the buyer responsible for the remaining 5%.
  1. Deposit: The deposit in a 95% mortgage is typically 5%. This initial pay functions as your equity in the property and represents the initial money you invest in your home.
  1. Interest Rate: The interest rate is a crucial factor, influencing your monthly repayment sums. Generally, 95% mortgages come with a higher interest rate compared to mortgages with a lower LTV ratio.
  1. Monthly Repayments: These are the repayment amounts you pay on a monthly basis to the lender, encompassing the loan principal and interest.
  1. Mortgage Term: It is the period over which you will repay the loan. Extended terms may offer lower monthly repayments, but accumulate more interest over time.

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Should you continue to save for a larger deposit than 5%?

Before committing to a 5% deposit scheme, it’s important to weigh the pros and cons. Saving more money for a larger deposit could offer a range of benefits, including:

  1. Lower Interest Rates: Banks often offer lower interest rates to individuals with a larger deposit, translating to lower monthly repayments.
  1. Access to Better Deals: A higher deposit can unlock better mortgage deals with more favourable terms.
  1. Reduced Risk of Negative Equity: The risk of falling into negative equity is reduced, as a larger deposit provides a buffer against fluctuations in property prices.

However, saving a more considerable sum demands time and patience, potentially delaying your plans to buy a home. Moreover, rising house prices could outpace your saving rate, an aspect worth considering in your decision-making process.

Can you get a 95% mortgage?

Securing a 95% mortgage is indeed possible, especially with the introduction of the government-backed 95% mortgage guarantee scheme. However, eligibility hinges on a variety of factors, such as:

  1. Credit Score: Your credit score is a pivotal element, with a good credit history increasing the likelihood of securing a loan.
  1. Affordability: Lenders assess your income and expenditure to determine how much you can afford to borrow.
  1. Employment Status: Stable employment can enhance your chances, as lenders favor applicants with a steady income.
  1. Debt Level: Existing debts can impinge on your borrowing capacity; therefore, keeping debts minimal is advised.
  1. Property Type: The type of property you aim to buy can influence the lender’s decision.

It is advisable to consult with a mortgage advisor to navigate the intricacies and secure a suitable deal.

What are the advantages of 95% Mortgages?

Opting for a 95% mortgage comes with an array of advantages:

  1. Lower Upfront Costs: The chief benefit is the reduced initial cost, facilitating home ownership with just a 5% deposit.
  1. Accessibility: 95 mortgages for first-time buyers offer an accessible pathway to enter the property market.
  1. Capital Appreciation: With a foothold in the property market, you stand to benefit from potential capital appreciation.
  1. Early Home Ownership: The lower deposit requirement means you can buy a home sooner than later, potentially in a preferred location.
  1. Guarantee Scheme: The government’s guarantee scheme offers a safety net to lenders, encouraging them to offer 95% mortgages.

What are the disadvantages of 95% Mortgages?

However, the 95% mortgage option is not devoid of drawbacks:

  1. Higher Interest Rates: The interest rate tends to be higher, leading to increased monthly repayments.
  1. Risk of Negative Equity: With a smaller deposit, you face a higher risk of negative equity, particularly if house prices decline.
  1. Limited Property Choices: You may find your choices somewhat limited, as not all properties qualify for a 95% ltv mortgage.
  1. Stricter Criteria: Lenders may impose stringent criteria, scrutinizing your credit history and financial stability meticulously.
  1. More Expensive in the Long Run: The cumulative interest over the loan term can make this option more costly over time.

Alison Gibson

Ascot Mortgage Expert

Remortgage

Remortgaging is applied when you keep

living in your present property while applying for another mortgage deal with a new lender. Before finding out how to remortgage and get the best offers from experts like Ascot Mortgages, you have to check meeting what parameters of the deal that can help you succeed the most. The range of background factors varies a lot — from the recently changed loan-to-value ratio or your existing agreement coming to an end.

Whether you are trying to get a more beneficial deal or searching for funding to improve your home conditions, remortgaging is one of the most advantageous scenarios to consider.

How does the 95% Mortgage Guarantee Scheme Work?

In a bid to stimulate the property market, the UK government introduced the 95% mortgage guarantee scheme. Under this scheme:

  1. Government’s Role: The government offers a guarantee to lenders, covering a portion of the losses if the borrower defaults, thus safeguarding the lender’s money.
  2. Eligibility: The scheme is designed for property purchases up to £600,000, aiming to assist a broad demographic, including 95 mortgages for first-time buyers, and making it easier for more people to invest money in property.
  3. Lender Participation: Various lenders participate in the scheme, availing 95% mortgages to potential homebuyers and providing more opportunities for people to borrow money for home purchases.
  4. Positive Impact on Property Market: The scheme has rejuvenated the property market, fostering more transactions and buoyancy in property prices.
  5. Duration: The guarantee scheme has a predetermined lifespan, so it’s imperative to check its availability and the latest updates when planning your purchase.

Choosing the Right 95% Mortgage

Selecting the right 95% mortgage requires a meticulous approach. Here, we lay down a roadmap to help you make an informed decision:

  1. Research: Start with comprehensive research to understand the different offers available in the market, including interest rates and repayment terms.
  2. Professional Advice: Seek advice from a professional mortgage advisor to align your choices with your financial reality.
  3. Budgeting: Craft a realistic budget that encompasses all costs involved, including deposit, monthly repayments, and other associated fees.
  4. Credit Score: Work on enhancing your credit score to augment your chances of securing a favorable deal.
  5. Comparing Deals: Use mortgage comparison tools to evaluate various deals, considering the interest rate, repayment terms, and potential monthly outlays.
  6. Emergency Fund: Establish an emergency fund to cushion yourself against unforeseen circumstances and ensure smooth repayment.

In conclusion, 95% mortgages offer a viable route to home ownership, particularly benefiting first-time buyers. While it comes with its set of pros and cons, making an informed decision guided by professional advice can pave the way for a successful home purchase. Engaging with a mortgage advisor with a robust understanding of the UK market dynamics can be your first step towards securing your dream home through a 95% ltv mortgage.

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FAQ

Yes, it’s possible to use a 5% deposit mortgage for remortgaging or refinancing, but it largely depends on the equity you have in your property. If your property has appreciated in value or you’ve significantly reduced the outstanding loan balance, you could be in a position to remortgage with a 95% LTV. However, it’s essential to consider any early repayment charges or fees with your current mortgage and the benefits of switching.

A 95% LTV mortgage means you’re only putting down a 5% deposit and borrowing 95% of the property’s value. This often results in:

– Higher Interest Rates: Generally, higher LTVs like 95% may come with higher interest rates compared to lower LTVs, which can lead to higher monthly payments.
– Larger Loan Amount: As you’re borrowing a significant portion of the property’s value, your monthly repayments will be based on this higher amount.

It’s always advisable to review and compare mortgage offers to determine the monthly costs and overall affordability.

The deposit size itself, be it 5% or otherwise, doesn’t have direct tax implications. However, if this is a second property, you’ll be subject to an additional 3% Stamp Duty Land Tax (SDLT) on top of the standard rates. If you’re buying a home in Scotland or Wales, the tax rules differ with the Land and Buildings Transaction Tax (LBTT) and Land Transaction Tax (LTT) respectively. Always consult with a tax advisor or solicitor to understand any potential tax obligations.

If the property value decreases after you’ve secured a 95% mortgage, you could find yourself in negative equity. This means you owe more on the mortgage than the property is currently worth. It can pose challenges if you wish to move home or remortgage, as selling the property wouldn’t cover the full mortgage amount. In such situations, it’s crucial to speak with your mortgage lender or a mortgage advisor to discuss the best course of action, which might include staying put until property values recover or making overpayments to reduce the mortgage balance.

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