No Deposit Mortgages

Can You Get a 100% Mortgage?

It is possible to get a mortgage in the UK without a deposit. Known as a 100% mortgage, this allows eligible buyers to borrow the full purchase price of a property without providing a deposit from their own savings.

Several lenders offer no-deposit mortgages, although the qualifying conditions vary. Some products are aimed at renters with a history of making regular rental payments, while others assess applicants based on their income, credit history and affordability. Certain arrangements also allow family members to provide additional security.

At Kerr & Watson, we help customers understand which no-deposit mortgage options may be available, how they compare with traditional mortgages and whether buying without a deposit is suitable for their circumstances.

What is a No-Deposit Mortgage?

A no-deposit mortgage, also known as a 100% loan-to-value (LTV) mortgage, allows you to borrow the full value of the property you wish to purchase without needing to pay any deposit upfront. This type of mortgage can help those who are struggling to save a significant deposit but still want to get on the property ladder. The options are however limited and lenders sometimes needing the mortgage payment to be less than current rent payments.

How Do Mortgage Deposits Work?

Typically, when you buy a house, you’re required to put down a percentage of the property’s value as a deposit. Most lenders ask for at least a 5% deposit, meaning if you’re buying a home worth £200,000, you’d need to save £10,000. The more you can save for a deposit, the better your chances of securing a mortgage with a lower interest rate. However, a no-deposit mortgage allows you to borrow the entire amount needed to purchase the property.

Which Lenders Offer No-Deposit Mortgages?

A small number of UK lenders offer mortgages allowing eligible customers to borrow up to 100% of a property’s value or purchase price.

The requirements are not the same across all lenders. Some assess previous rental payments, others place greater emphasis on income and affordability, and certain products have restrictions on the types of property they will accept.

Examples include Skipton Building Society and April Mortgages.

Availability, mortgage rates and lending criteria can change. A mortgage adviser can help establish which products may be suitable for your circumstances.

Who Can Qualify for a No-Deposit Mortgage?

Getting a mortgage without a deposit is possible, but lenders have specific eligibility requirements. These vary depending on the mortgage product, and not all applicants will qualify for 100% borrowing.

The main factors lenders consider include:

• Income and affordability: You must demonstrate that you can afford the monthly mortgage repayments alongside your regular living expenses and existing financial commitments. Some lenders also have minimum income requirements.
• Credit history: A good credit history is particularly important when borrowing without a deposit. Recent missed payments, defaults or other credit problems may limit your options.
• Rental payment history: Some lenders use your rental history to assess eligibility. For example, Skipton Building Society’s Track Record mortgage requires evidence of 12 consecutive months of rent payments within the previous 18 months. Other lenders do not require a history of renting.
• Employment circumstances: Lenders assess employed and self-employed applicants differently. Your income, employment history and the evidence available to support your earnings can influence which products you qualify for.
• Property eligibility: Not every property is acceptable for a no-deposit mortgage. Some lenders restrict borrowing on flats, new-build properties or certain construction types.

For example, April Mortgages offers a 100% mortgage that does not require applicants to demonstrate a rental payment history. However, its No Deposit product is currently restricted to eligible houses and excludes flats and new-build properties.

Being unable to meet one lender’s requirements does not necessarily mean you cannot obtain a no-deposit mortgage elsewhere. At Kerr & Watson, we can review your circumstances and help establish which lenders and mortgage products may be suitable.

100% Mortgages and Guarantor Mortgages

An alternative to a no-deposit mortgage is a . This involves having a family member or friend agree to meet any repayments you miss. There are two main types of guarantor mortgages:

100% Mortgages and Family-Assisted Mortgages

Some buyers may be able to obtain a mortgage without providing their own deposit by using a family-assisted mortgage arrangement.

Depending on the lender and product, this could involve:

• Savings as security: A family member places money into a savings account linked to the mortgage. Access to these savings may be restricted for a specified period or until certain conditions are met.
• Property as additional security: A family member offers security against their own property, potentially allowing the buyer to borrow without a conventional deposit.
• Guarantor arrangements: A family member agrees to take responsibility for certain mortgage obligations if the borrower cannot meet them.

These arrangements differ from standard no-deposit mortgages and can create financial risks for the family member providing support. In particular, offering property as security could put that property at risk if mortgage repayments are not maintained.

Can You Get a No-Deposit Mortgage Without a Guarantor?

Yes. Some UK lenders offer 100% mortgages without requiring a parent, family member or guarantor to provide security.

Eligibility depends on the mortgage product. Some lenders assess your rental payment history, while others consider your income, credit history, affordability and the property being purchased.

Family-assisted mortgages may offer another route. Depending on the arrangement, a relative might provide savings or property as security, or join the mortgage to support affordability. These arrangements have different financial and legal implications.

Does No Deposit Mean No Savings Are Needed?

Although a 100% mortgage may remove the need for a property deposit, you should still budget for other costs associated with buying a home.

These may include conveyancing fees, property surveys, moving expenses, mortgage-related fees and Stamp Duty Land Tax or the relevant property transaction tax, where applicable.

You should also consider having money available for unexpected repairs or other expenses once you own the property.

A no-deposit mortgage does not automatically mean you can purchase a home without any savings.

Disadvantages of No-Deposit Mortgages

Higher Borrowing Costs

Borrowing 100% of a property’s purchase price means taking out a larger mortgage than if you contributed a deposit.

No-deposit mortgages may also have higher interest rates than comparable products available to buyers with larger deposits. This can increase monthly repayments and the total interest paid over the mortgage term.

Risk of Negative Equity

With a 100% mortgage, you start with little or no equity in your property.

If house prices fall, you could find yourself owing more than your home is worth. This is known as negative equity and could make selling or remortgaging more difficult.

For example, if you purchased a property for £250,000 with a 100% mortgage and its value subsequently fell by 5%, it would be worth £237,500. If the mortgage balance remained £250,000, you would be in negative equity by £12,500.

Limited Lender Choice and Remortgaging Options

There are fewer lenders offering 100% mortgages compared with mortgages requiring a 5% or 10% deposit.

This can restrict the products available when purchasing and potentially when remortgaging. If your loan-to-value remains high at the end of your initial mortgage deal, you may have fewer opportunities to switch lenders.

Some no-deposit products also have longer fixed-rate periods, so it is important to understand the mortgage terms and any applicable early repayment charges before proceeding.

What Are the Alternatives to a No-Deposit Mortgage?

If you do not qualify for a 100% mortgage, there are other ways to buy a home with a small deposit or financial support from family members.

The most suitable option will depend on your income, savings, credit history and the property you want to purchase.

95% Loan-to-Value Mortgages

A 95% loan-to-value (LTV) mortgage allows you to buy a property with a 5% deposit. For example, purchasing a £250,000 home would require a £12,500 deposit and a £237,500 mortgage.

Saving a 5% deposit may provide access to a wider range of lenders and mortgage products compared with borrowing 100% of the purchase price.

The government’s permanent Mortgage Guarantee Scheme also supports the availability of 91–95% LTV mortgages through participating lenders. However, this scheme does not provide 100% mortgages or remove the need for a deposit.

Low-Deposit Mortgages

Some lenders offer specialist mortgage products that require a relatively small fixed deposit rather than a traditional percentage of the property’s value.

These products can help buyers who have some savings but have not accumulated a full 5% deposit. However, they may have restrictions on income, affordability, property value or the type of property being purchased.

Gifted Deposits

If a family member is willing to help, you may be able to use a gifted deposit towards your property purchase.

Many lenders accept deposits gifted by close relatives, provided the money is a genuine gift rather than a loan that must be repaid. The lender will usually require confirmation of the gift and evidence of where the funds have come from.

A gifted deposit could allow you to access mortgage products that would otherwise require you to save for longer.

Family-Assisted Mortgages

Some lenders offer arrangements that allow family members to support a mortgage application without necessarily gifting money towards the deposit.

Depending on the product, family members may be able to provide savings or property as additional security, or use their income to support affordability.

These arrangements have different eligibility requirements and potential financial implications for the family members providing assistance.

Shared Ownership Mortgages

Shared Ownership allows eligible buyers to purchase a share of a property, usually between 10% and 75%, and pay rent on the remaining share.

Because the mortgage is based on the share being purchased, the deposit required may be considerably smaller than when buying the entire property.

However, buyers must consider the combined costs of mortgage repayments, rent, service charges where applicable and any future increases.

Read more aboout Shared Ownership Mortgages.

Which Option Is Right for You?

A no-deposit mortgage is not necessarily the most suitable or cost-effective way to buy a home.

At Kerr & Watson, we can compare 100% mortgages with low-deposit and family-assisted options, considering your circumstances, monthly repayments and longer-term plans.

This can help you understand whether buying now or saving a larger deposit would be more appropriate.

Frequently Asked Questions About No-Deposit Mortgages

Can I get a 100% mortgage if I have previously owned a property?

Some products are available to eligible previous homeowners, although others restrict applicants based on their homeownership history.

Can I get a no-deposit mortgage if I am self-employed?

Potentially, depending on the lender’s requirements, your income evidence, affordability and the property. Self-employment does not automatically exclude an applicant from every 100% mortgage.

Can I buy a new-build property without a deposit?

Some no-deposit products accept new-build houses, but restrictions vary and certain lenders exclude new-build properties or flats.

What happens if the property valuation is lower than the purchase price?

The lender may limit borrowing based on its valuation. This could mean the buyer needs to provide additional funds or renegotiate the purchase price, depending on the mortgage product.

How Kerr & Watson Can Help with a No-Deposit Mortgage

No-deposit mortgages have different lending criteria, so understanding which products may be suitable is important before making an application.

At Kerr & Watson, we can review your income, employment, credit history, rental payments and property plans to establish which mortgage options may be available.

We can also compare the costs and risks of buying with no deposit against waiting until you have saved a deposit or using family assistance.

If you decide to proceed, we can arrange an Agreement in Principle where appropriate, submit your mortgage application and liaise with the lender through to mortgage offer and completion. Contact us