Money Saving Expert Martin Lewis has issued a warning to house hunters over the government's new 95% mortgages.
The government has introduced the new mortgages in a bid to enable more people to buy a home.
But Martin has issued a warning to those considering the new scheme in his weekly Money Saving Expert newsletter.
Explaining the new initiative Martin said: "The new Govt mortgage scheme means more 95% loan-to-value (5% deposit) mortgages.
"Lenders tightened pandemic-borrowing criteria which meant the supply of low deposit mortgages was throttled right back.
"Since Monday, under the mortgage guarantee scheme (MGS), the Govt covers a portion of the mortgage risk on properties up to £600,000 (excluding new-builds), so lenders can offer more up-to-95% loan-to-value (LTV) mortgages."
Seven major mortgage providers are taking part in the new scheme, but Martin warned people that these mortgages aren't special.
He said: "Barclays, HSBC, Lloyds, NatWest, Halifax and Santander are offering loans under the MGS for first-time buyers and home movers, but there is also now a growing number of 95% mortgages that aren't part of the scheme.
"Many lenders offering MGS mortgages are hyping it up. But don't favour a mortgage just as it's part of the scheme.
"The MGS offers lenders surety so they can offer more mortgages, but they aren't any better for borrowers - so pick solely based on which offers the best terms."
Martin then urged people to save for a bigger deposit if they could instead, because 95% mortgages are not "the bee's knees."
Martin said: "They are far more expensive than if you can push to a bigger deposit, even just getting to a 10% down payment.
"As a rough rule, for each five percentage-point extra deposit you have, mortgages get cheaper, until you've a 40% deposit."
