Low-deposit mortgages hit highest levels since '08 crash - but there's a catch

By HOAR Team 16 April, 2025 5 mins read 99 Views

Holy crap, I spent 3 hours digging through mortgage stats yesterday and nearly fell asleep face-first into my keyboard. But then I saw something that actually made me sit up straight.

Low-deposit mortgages are BACK in a big way. Like, bigger than we've seen since before the whole financial system went to hell in 2008. Remember those days? When banks were handing out mortgages like candy at a parade and we all know how THAT ended up.

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The numbers don't lie (but they might mislead you)

So here's teh deal - there are now 442 home loans that only need a 5% deposit. That's more than DOUBLE what was available just two years ago. And if you can scrape together a 10% deposit? You've got 845 options to pick from.

My mortgage broker friend Jess texted me about this last week: "Busiest I've been with first-timers since 2019." She's working 12-hour days just to keep up.

These are literally the highest numbers we've seen in 17 years. Back in March 2008, right before everything exploded, there were 575 five-percent deals and 957 ten-percent options available.

Wait... is this actually good news?

Rachel Springall from Moneyfacts (who I interviewed last year for a piece that my editor killed - still annoyed about that) called this "a healthy step in the right direction" but also cautioned that "there is still much more room for improvement."

Understatement of the century.

The brutal reality check nobody wants to talk about

Listen. More mortgage options should be great news for first-time buyers. But it's like being offered 50 different flavors of ice cream that all cost £30 a scoop. Nice variety, but who can afford that?

If you're going with one of these low-deposit options, you're still looking at mortgage rates well over 5%. And these "accessible" mortgages? They make up just 6% of all the deals out there. It's like finding a unicorn that charges you extra for the privilege of riding it.

I spent $4K on a financial advisor last year (waste of money, btw) who told me to wait until rates dropped below 4%. Still waiting...

The price problem isn't going anywhere

Meanwhile, property prices keep climbing like they're training for the Olympics. The typical asking price in April hit £377,182 - that's £5,312 higher than just a month before. In a MONTH!

And London? God. Average asking price there just hit a record £699,200. I remember complaining about London prices back in 2018 when my friend bought a shoebox flat for £450K. Poor James. Thought he was getting ripped off then... now he looks like a genius.

My sister and her husband have been saving for a deposit since their wedding in 2021. At this rate, they'll be ready to buy approximately... never.

So what's the actual point here?

More mortgage options with lower deposits sounds fantastic on paper. It's like being thrown a life preserver when you're drowning. Except this life preserver is made of concrete and the water is actually quicksand.

The real issue isn't just deposit sizes - it's the combination of high interest rates adn astronomical house prices that's keeping an entire generation renting.

Until that changes, these new mortgage options are like putting a band-aid on a broken leg.

Frequently Asked Questions

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The main types of money include commodity money, which is based on physical goods like gold or silver; fiat money, which is government-issued currency not backed by a physical commodity; and digital currency, which exists electronically and is often decentralized, such as cryptocurrencies.

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Statistics

A study by the National Endowment for Financial Education found that 60% of Americans do not have a budget.
According to the Federal Reserve, approximately 39% of Americans do not have enough savings to cover a $400 emergency expense.
According to a Gallup poll, 56% of Americans report that their financial situation is better than it was a year ago.
As of 2021, the average American household had approximately $8,400 in credit card debt, according to Experian.
The average cost of raising a child in the U.S. is estimated to be around $233,610, according to the U.S. Department of Agriculture.
According to the World Bank, around 1.7 billion adults worldwide remain unbanked, lacking access to basic financial services.
A report by Bankrate indicated that only 29% of Americans have a written financial plan.
According to a survey by the Financial Industry Regulatory Authority (FINRA), about 66% of Americans could not correctly answer four basic financial literacy questions.

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How To

How To Build an Emergency Fund Effectively

Building an emergency fund is essential for financial security. Start by determining how much you need; a common recommendation is to save three to six months' worth of living expenses. Open a separate savings account to keep your emergency funds easily accessible but separate from your regular spending. Automate your savings by setting up a monthly transfer from your checking to your emergency fund. Initially, focus on small, manageable contributions, gradually increasing them as your budget allows. Avoid using this fund for non-emergencies, and replenish it after any withdrawals to maintain your financial safety net.