No Deposit Mortgage

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No Deposit Mortgage (Part 1)

Rohit Kohli explains how a no deposit mortgage works. Episode one of two, recorded in June 2025.

Can you buy a house with no deposit? What is a no deposit mortgage?

There are lenders now offering mortgages without you needing a deposit – also known as 100% mortgages. Getting one depends on your circumstances, including how much you earn, any existing loans, credit cards or other liabilities, your overall credit score and, in some cases, your rental history.

If you fit the requirements, you could potentially secure a mortgage to buy a house without a deposit.

How does a no deposit mortgage work? What types of mortgages are available with no deposit?

There are different types of no deposit mortgages. For example, there’s one where the lender looks at your track record in renting. If you’ve got a strong rental history where you’ve consistently paid your rent on time, they use that to assess how much to lend you on a 100% property purchase.

There are also more traditional mortgages that are assessed on your income and the other factors we mentioned. Most no deposit mortgages, however, will require you to take on a fixed rate of at least five years – with some requiring you to lock in for longer at 10 years plus.

The other thing to consider is whether to potentially buy a shared ownership property with no deposit, if you qualify [Information correct at the time of recording in June 2025].

Which banks or lenders offer no deposit mortgages? Who offers no deposit mortgages in the UK? Are there many?

It’s fairly new. It’s just been in the last few months that lenders have started to introduce no deposit mortgages. They used to be everywhere before the 2008 financial crisis. You could get 100% mortgages then, and lenders are just dipping their toes back into it now.

Lenders like Skipton, April Mortgages and Gable Mortgages are some of the lenders now offering mortgages without a deposit [correct in June 2025].

Also, if you’re considering buying a shared ownership property and don’t have a deposit, more building societies and banks could support this.

Can First Time Buyers get a no deposit mortgage? Who is eligible for one?

These schemes are targeted firmly at First Time Buyers, to help them get onto the property ladder – especially with property prices ever rising and making it difficult.

Having said that, if you already own a home and are looking to move, you could potentially qualify for a no deposit mortgage for your next home.

But this is absolutely not for Buy to Let purposes, and most lenders who offer these no deposit schemes won’t even allow you to change it to a Buy to Let in future, using Consent to Let. That’s only possible in extreme circumstances – so this really is only to buy your own home.

Is a no deposit mortgage the same as a 100% mortgage?

Definitely, yes. The difference is just marketing. Some lenders will call it a no deposit mortgage and others call it a 100% mortgage, but it’s one and the same.

Do I need a guarantor for a no deposit mortgage?

You don’t need a guarantor for a no deposit mortgage, and most lenders won’t even accept a guarantor on these. It’s all based on your circumstances, your income, your affordability and your liabilities.

What credit score do I need for a no deposit mortgage? Can I get a mortgage with no deposit if I have bad credit?

Most lenders who offer this need you to have a strong credit score and credit history. They are looking at the risk to them of giving you a no deposit mortgage. Effectively, they’re providing all the money you need to buy that property.

Unfortunately, if you’ve had bad credit in the past, you’re unlikely to get a no deposit mortgage because of the higher risk for the lender.

Do I need a family member to support my application?

You don’t need a family member to help you with this. It’s all assessed on your household circumstances. If you and a partner are buying together, it’s based on your joint income and expenditure – they’ll ignore anything to do with your family.

Are there income requirements or limits?

Each lender has their own requirements for you to meet. For example, with one lender, you may need to have rented for a minimum of 18 months and show a track record of that.

Another lender sets a minimum combined income of £24,000 between whoever’s purchasing the property. There are other, further requirements as well.

We would assess your circumstances and talk about which one works for you. There may be two or three different options to look at – we’ll see which one fits your circumstances better.

Are no deposit mortgages backed by the government?

These schemes aren’t backed or underwritten by the government. It’s the lenders introducing them. They recognise the challenges people face in buying their first home or moving.

Shared ownership is the main scheme that’s backed by the government. There aren’t many other schemes available at the moment. There are some new build opportunities to look at, but you won’t necessarily get a no deposit or low deposit mortgage for those – most lenders won’t offer them on new build properties.

What else do you want to highlight before we return for part two?

It’s important to say that lenders are always looking to innovate and introduce new products.

The market changes on a regular basis, and we fully expect other lenders to come up with other ideas and solutions to help people get onto the property ladder. So watch this space.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS. NOT ALL BUY TO LET MORTGAGES ARE REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

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No Deposit Mortgage (Part 2)

Rohit Kohli returns to continue the conversation on no deposit mortgages. Episode two of two, recorded in June 2025.

Are interest rates higher on no deposit mortgages?

The bottom line is yes. Typically, you’ll find that the interest rate for a no deposit mortgage is higher than a mortgage with a deposit. This reflects the higher cost to the lender and the additional risk they’re taking.

One of the reasons why we suggest talking to a mortgage broker is to really look at your options. If you can save for a deposit of ideally 5%, you may get a better rate. You’ll have more choice even with a small deposit to purchase a home.

How much can I borrow with a no deposit mortgage?

It depends on a number of factors, but particularly your income. Most lenders will work towards 4.5 times your income, but the borrowing total is reduced by some other circumstances.

You may have loans, liabilities, credit card balances, student loans, dependents… Those will all affect how much a lender will lend you. So there’s no hard and fast answer to how much you can borrow – the best thing is to speak to an expert to guide you.

Do I need to pay extra fees?

There aren’t necessarily extra fees, but you do need to think about fees in general. Most will charge a product fee or a lender fee.

Typically, with a normal mortgage you can add that onto the loan, so you’re not paying it upfront. Obviously you would pay interest on that and it costs you more in the long run.

With no deposit mortgages, you have to pay those fees up front. You can’t add them to the mortgage. They can range in value between £1,000 to £2,500 – so you will need some savings there, and also money for legal fees and any surveys you want to do.

There may also be moving costs, and of course stamp duty if you have to pay that – so it’s not a completely cashless purchase. You will need some level of savings to buy a home.

Are repayments higher on a no deposit mortgage?

As the interest rates are higher on a no deposit mortgage, yes, it will generally make your repayments higher.

But there are ways to mitigate this, such as potentially extending your mortgage term. That will make the overall cost of your mortgage higher over its life, because you’re paying interest for a much longer period of time.

We would assess your situation and give you the scenario to work with your budget.

Could I go into negative equity with a no deposit mortgage?

Negative equity is where the value of your house falls below the mortgage secured on it.

Let’s say your house was worth £200,000 when you bought it. For one reason or another, the property value has reduced to £170,000 and your mortgage is £190,000. You’re in negative equity because if you were to sell the house, you wouldn’t be able to repay that mortgage in full. You’d still owe money to the lender.

With a no deposit mortgage, the risk of going into negative equity is significantly higher.

That’s typically why most lenders won’t let you buy new build property with a 100% mortgage because the value of a new build is more uncertain. It could reduce before increasing in the longer term.

You should think carefully about this. Although house prices are generally moving upwards, if they were to fall, negative equity could cause you issues. The lender will assess the property you’re buying, as well. They can’t predict what the value is going to be in the future, but they will look to see whether it’s suitable.

What are the risks of borrowing 100% of the property value?

There are a couple of things to think about. We’ve touched on negative equity.

The next risk is about thinking long-term. When it comes to remortgaging, will you have paid enough off your mortgage and will the value of your property have changed? The more equity you have, the better your chance of remortgaging onto a standard product. Otherwise, you could still be stuck with the lender you’ve got your 100% mortgage with.

The other thing to think about is your earnings and whether they will grow in the longer term. If they will be fairly flat, that may also have an impact on your remortgaging options in future.

So a 100% mortgage is not just a decision for today. You need to think about the impact longer term.

What are the alternatives to a no deposit mortgage? Is it better to save for a deposit instead?

It’s always better to buy a property with a bigger deposit because you will get a better deal from your lender. They will give you better interest rates as the risk they take reduces.

If you can save for a deposit, it’s a better route to choose – although that’s not always possible, which is why these deals were introduced.

There are alternatives to no deposit mortgages. For example, there’s one lender offering a low deposit mortgage where you can potentially purchase a property with a deposit of £5,000.

Alternatively, if you have family or friends that are willing to help you, there are options there. You could borrow more by using the earnings of friends and family to boost the total income.

Or, perhaps a family member can give you a gift towards your deposit – that could open up some options for you.

Shared ownership is potentially another option to look at. You could potentially do it with no deposit, or a much smaller deposit. It can help you purchase your own home, albeit still renting part of it.

Can I switch to a different mortgage later?

When your current fixed rate ends and it’s time to remortgage, potentially, yes, you can switch to a different mortgage at that point in time.

It goes back to what we said about thinking long-term. If your circumstances allow, you could switch to another lender or another mortgage product. If not, you may have to stick with your current lender and their products. My advice with 100% mortgages is to think about the future plan too.

How can a mortgage broker help with a no deposit mortgage?

Some of these no deposit or low deposit deals are only available through a mortgage broker. The reason is that lenders want us to assess your situation and suitability for a no or low deposit mortgage. We have conversations to make sure that it’s right for you.

But by speaking to a mortgage broker, it’s not just about low or no deposit mortgages. We can also look at alternative options and help you develop a longer term plan to find the right solution for you.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS. YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.