Accumulating a deposit can be one of the most challenging steps to property ownership, particularly for first time buyers in Birmingham.

House prices have been steadily climbing over the last 20 years, making it harder to afford the necessary deposit for a mortgage. So, how much money do you need to secure a mortgage and can it be as low as 5% in Birmingham?

Can you get a mortgage with a 5% deposit in Birmingham?

On average, lending firms ask for a minimum deposit equivalent to 5% of the property’s worth. For instance, if you aim to purchase a property valued at £200,000, you’d need a £10,000 deposit.

As a mortgage broker in Birmingham, we’ll evaluate your earnings and financial capacity to determine if you afford a 5% deposit or need to provide a larger sum.

Can you get a mortgage with a 5% deposit with bad credit in Birmingham?

It can be achievable to secure a mortgage with a 5% deposit with adverse credit in Birmingham. However, it largely depends on the duration and extent of your credit issues.

Usually, applicants with poor credit scores are asked to provide a higher deposit, generally in the range of 10%-15% of the property value.

Is there anything else to help me buy a property in Birmingham?

Each with its unique set of benefits. Some of the more popular options include:

Mortgage Guarantee Scheme

Mortgage Guarantee Scheme: This programme can support you as a first time buyer in Birmingham in securing a 95% mortgage, i.e., with a 5% deposit. This scheme may be useful in improving your chances of securing a mortgage with a 5% deposit, depending on your financial situation and credit health.

Shared Ownership Scheme

Shared Ownership Scheme: This scheme offers a practical and affordable route to homeownership, allowing individuals to partly own and partly rent a property. Participants can purchase a share of the property, typically ranging from 25% to 75%, while paying rent on the remaining quota. Over time, they have the option of increasing their share, on a step-by-step basis, eventually leading to full ownership.

Lifetime ISA

Lifetime ISA: It’s an incentive, not a scheme per se, designed to assist first time buyers in saving up for their deposit. It offers a tax-saving opportunity for those aged between 18 and 40 planning to buy their first property. Contributions can reach up to £4,000 per year, with the government providing a 25% bonus (£1,000 maximum) to support property purchases.

Visit OwnYourHome

For a comprehensive list of such schemes, visit OwnYourHome.gov.uk. Alternatively, reach out to our mortgage advisors in Birmingham for a discussion regarding your mortgage options.

You might discover that with your financial capability, a 5% deposit mortgage may already be within your reach, even without resorting to an aid scheme.

If you are a first time buyer in Birmingham, schedule your cost-free mortgage consultation and initiate your journey online today.

Date Last Edited: February 20, 2024