It found that only one in five (22%) people under 25 years old believed that the scheme could be relevant to them.
As well as this, 78% of working age people felt they did not have a good grasp of the full support available to help them get on the property ladder.
The study also highlighted other important knowledge gaps about mortgages.
For example, only 17% of under-35s understood that first-time buyers may not need to pay stamp duty, and 19% did not know that mortgage lenders can consider day-to-day spending habits in mortgage applications.
A further 23% said that they would trust mortgage information from unofficial online forums, such as Quora, Yahoo Answers or Reddit.
Richard Eagling, senior mortgages expert at NerdWallet, said: “While government-backed 95% mortgages have been welcomed by many, our research suggests that its benefits may not yet be widely known among potential buyers.
“Although not right for everyone, the scheme is a significant development for those who would otherwise be unable to put down a larger mortgage deposit – meaning that many who are unaware of it could miss out on getting a foothold on the property ladder.
“Building a decent deposit is one of the biggest challenges home buyers face, and this has only become more difficult as house price growth has rocketed over the last year.
“Mortgages that are offered at 95% loan-to-values are something of a lifesaver for many borrowers, but if the new mortgage guarantee scheme is going to succeed then more needs to be done to raise awareness of how it works and who could be eligible.”
