Freedom to Buy Mortgage Guarantee Scheme

The Mortgage Guarantee Scheme — rebranded "Freedom to Buy" and made permanent in July 2025 — helps buyers purchase a home with just a 5% deposit by supporting lenders who offer 95% loan-to-value mortgages. The government guarantees part of the loan, which encourages lenders to keep low-deposit deals available, so you can buy sooner without saving a large deposit.

In this insight we explain how the scheme works, who can use it, and the alternatives worth weighing up.

---

Key Takeaways

• You need a 5% deposit and the scheme supports a mortgage of up to 95% of the property's value.
• The guarantee is given to the lender, not to you — you still take out a normal repayment mortgage.
• It is open to first-time buyers and home movers buying a home to live in, not buy-to-let or second homes.
• You still have to pass the lender's usual affordability and credit checks.

---

What is the Freedom to Buy scheme?

Freedom to Buy is the permanent form of the Mortgage Guarantee Scheme. The government provides lenders with a partial guarantee on 91%–95% mortgages, reducing the risk of offering low-deposit loans. That helps keep 95% deals on the market, so buyers with modest savings still have choices.

Importantly, the support goes to the lender. From your side it is an ordinary mortgage — you make normal monthly repayments and the guarantee has no direct effect on you.

Who qualifies?

The scheme is aimed at buyers who need a low-deposit mortgage. Typical criteria include:

• You have a deposit of between 5% and 9% of the purchase price.
• You are buying a home to live in (not a buy-to-let, holiday home or second property).
• The mortgage is a repayment mortgage, not interest-only.
• You pass the lender's standard affordability and credit checks.

It is open to first-time buyers and existing homeowners moving home. Individual lenders may add their own rules, such as a maximum property price.

How it works, step by step

1. Save a 5% deposit. Our guide on the best way to save for a house has practical tips.
2. Get a mortgage in principle from a lender offering a 95% deal.
3. Apply as normal — the lender runs the usual income, credit and affordability assessment.
4. Complete your purchase with your 5% deposit and the 95% mortgage.

You can get a feel for what a 95% mortgage might cost each month:

Things to weigh up

A small deposit gets you onto the ladder sooner, but there are trade-offs:

• Higher rates: 95% mortgages usually carry higher interest than lower loan-to-value deals.
• Less of a cushion: with only 5% equity, a fall in prices could put you into negative equity.
• Larger loan: borrowing more means higher monthly payments and more interest over time.

Saving a slightly bigger deposit, where realistic, can unlock cheaper rates and more breathing room.

Alternatives to consider

• A larger deposit to access 90% or 85% mortgages with better rates.
• A Lifetime ISA, which adds a 25% government bonus (up to £1,000 a year) on savings toward a first home.
• Shared ownership, buying a share of a property and paying rent on the rest.
• A guarantor or family-assisted mortgage, where relatives help you qualify.

If you are just starting out, our overview of buying a house and the first-time buyer hub bring the whole journey together.

How big a deposit do I need for Freedom to Buy?

Just 5% of the purchase price. The scheme supports mortgages up to 95% of the property's value.

Is it only for first-time buyers?

No. Both first-time buyers and home movers buying a home to live in can use it, subject to each lender's rules.

Is the scheme still available?

Yes. It was made permanent in July 2025 under the Freedom to Buy branding, replacing the earlier temporary Mortgage Guarantee Scheme.

Can I use it for a buy-to-let?

No. It is only for a home you will live in, not for buy-to-let or second homes.