Mortgage Sorter | 95% Ninety five Percent Mortgages

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95% Mortgages

What Is A Ninety Five Percent Mortgage?

If you borrow 95% of the purchase price of a home you are buying, you have taken out a 95% mortgage.

The percentage is simply a reference to how much of the property's value you have borrowed.

95% mortgages are reasonably common, especially with first-time buyers, and are no longer subject to as many extra lending charges as they used to be.

Note: Higher Lending Charges or HLCs, are still charged by some lenders for mortgages in excess of 90% of the purchase price. If you receive a quotation from a lender that includes a HLC, think carefully before accepting. It is an extra cost and there are plenty of lenders that do not charge Higher Lending Charges anymore.

Why Choose A 95% Mortgage - Why Not 100%?

You may think that by taking a 100% mortgage and keeping your deposit you will be better off – after all, you will hardly notice the extra payments, right?

Wrong.

By putting down a 5% deposit and getting a 95% mortgage, you are likely to get a lower interest rate and will save a significant amount of money on reduced interest payments over the life of the mortgage – remember, mortgages last 25 years (or more).

By putting down a deposit, you also provide some protection for yourself against negative equity – when your house is worth less than you owe on your mortgage.

A 5% deposit means prices can fall 5% before you need to worry – which can be very useful if you need to sell at a bad time.

I'm Convinced. How Can I Find The Best 95% Mortgage?

There are a lot of 95% mortgage deals around. Finding the best one on your own can be a little like looking for a needle in a haystack.

The best plan is to contact an independent mortgage adviser and let them do the legwork – they have access to computer programs that can search the entire mortgage marketplace, ensuring that you do not miss out on the best deal for you.

To read more on this subject please see the list below or your mortgage guide or your home buying guide

Read enough? Just want a quote? To get your best mortgage quote quickly and easily we can put you in contact with a recommended mortgage adviser. It's free, completely confidential and there's no obligation at all. Simply fill out the form below


Value of Property	£
		(eg 125000)

Borrow How Much?	£
		(eg 92500)

Your Mortgage Type

First time buyer?		Yes No
Have you found property?		Yes No
Country

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