Can I Get a Mortgage With No Deposit in the UK?

Can you really get a 100% mortgage in the UK?

Yes. A 100% mortgage allows you to borrow up to the full purchase price of a property without providing the traditional cash deposit.

For example, if you bought a property for £200,000 with a 100% mortgage, you could potentially borrow the full £200,000, subject to the lender’s affordability assessment and eligibility criteria.

These mortgages are sometimes referred to as no-deposit or zero-deposit mortgages.

How does a no-deposit mortgage work?

With a traditional 95% mortgage, you provide a 5% deposit and the mortgage lender provides the remaining 95%.

With a 100% mortgage, the lender can potentially provide the entire purchase price.

You’ll still need to demonstrate that you can afford the mortgage repayments and meet the lender’s other requirements.

You should also budget for the other costs associated with buying a home, even if you don’t need to provide a mortgage deposit.

Do I need family help to get a 100% mortgage?

Not necessarily.

Some low or no-deposit mortgages involve support from parents or other family members. This could involve family savings or equity in another property being used as additional security.

However, there are also mortgage products that may allow eligible applicants to borrow without a traditional deposit or family contribution.

The requirements vary considerably between mortgage products.

Are 100% mortgages more expensive?

They can be.

Mortgage lenders generally offer their widest choice of products to borrowers with more equity or a larger deposit.

With a 100% mortgage, there may be fewer products to choose from and the interest rate could be higher than rates available to someone with a 5%, 10% or larger deposit.

It’s therefore important to compare the overall cost rather than looking only at whether a mortgage requires a deposit.

What is the risk of negative equity?

Negative equity means your outstanding mortgage is greater than the value of your property.

Because you begin a 100% mortgage with little or no equity in your home, a fall in property prices could potentially put you into negative equity more quickly.

For example, if you bought a property for £200,000 with a £200,000 mortgage and its value subsequently fell to £190,000, you could owe more than the property was worth.

This can make selling or remortgaging more difficult until you’ve reduced the mortgage balance or the property’s value has recovered.

Before considering this type of mortgage, it’s worth understanding the pros and cons of 100% mortgages.

Is a 95% mortgage better than a 100% mortgage?

Not necessarily — it depends on your circumstances.

If you’re able to save a 5% deposit, a 95% mortgage can potentially give you access to a wider choice of mortgage products and different interest rates.

However, saving the additional deposit can take time, particularly if you’re paying rent at the same time.

The right approach will depend on your finances, the property you’re buying and the mortgage products available when you’re ready to purchase.

Can first-time buyers get a mortgage with no deposit?

Potentially. Some 100% mortgage products are specifically aimed at helping people who are struggling to save a traditional deposit.

You’ll still need to meet the lender’s affordability and eligibility criteria, and having no deposit doesn’t mean there are no upfront costs associated with buying a property.

A mortgage adviser can help you compare a no-deposit mortgage with other options available to first-time buyers.

Can a mortgage broker help me find a no-deposit mortgage?

Yes. Because the number of 100% mortgage products is relatively limited and lender criteria differ, getting advice can be particularly useful if you don’t have a traditional deposit.

A mortgage adviser can look at your income, expenditure and circumstances and compare no-deposit mortgages with alternatives such as 95% and family-assisted mortgages.

At GHL Direct, we compare thousands of mortgage deals from more than 50 UK lenders and can help you explore mortgage options with a small or no deposit.

Looking to buy a home without a large deposit? Speak to a mortgage adviser and find out what mortgage options may be available.