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What is a no deposit mortgage?
A no deposit mortgage is when you borrow the whole value of the property's value, without putting up a deposit. These are often also known as “100% mortgages”.
How do no deposit mortgages work?
Every mortgage has a loan to value (LTV) ratio, which is the percentage of your home's value that has been purchased with a mortgage as opposed to any money you supply.
This could be in the form of a deposit you have saved or equity from your current home – in other words the amount of money you would get after you sold your home and paid back your current mortgage.
100% LTV means the mortgage covers the whole amount. For example, if your house costs £180,000, you would borrow the full £180,000 through a 100% mortgage.
Can you get no deposit mortgage?
Although rare, it is still possible to get mortgages for 100% of your house's value. In most cases, no deposit mortgages are usually only available if you're an existing customer of the lender or have a guarantor.
The guarantor can either be a friend or family member who is willing to put his own home or savings at risk, in the event that you default on your mortgage.
Can you get a mortgage with no deposit for your first home?
In most cases, the 100% mortgages you can get as a first time buyer in the UK is a guarantor mortgage. You can only get one of these if a parent or someone else is named on your mortgage to cover any payments you miss.
Most of the deals in this comparison are not guarantor mortgages, but you can find them and other deals designed to help you get on the property ladder by using our first time buyer mortgage comparison.
Here are all your options for getting a mortgage without a deposit.
Can you get mortgages for more than 100% LTV?
Yes, but only if you are an existing borrower getting a remortgage on your current property.
For example, if your house has gone down in value, you could owe more on your mortgage than your house is worth. This is called negative equity.
If your home is now valued at £150,000 but you owe £180,000 on your mortgage, you need a 120% LTV deal if you get a remortgage.
Here is what to do if you are in negative equity but want to sell
No deposit mortgages FAQs
What is a 0% mortgage?
The term “0% mortgage” is often mistakenly used to describe no-deposit mortgages (also correctly referred to as 100% mortgages”). A 0% LTV would imply that you're paying for the entire purchase value yourself, so you'd have no need to get a mortgage, but would simply buy the property outright with cash.
How can I save a deposit?
Here’s our guide on how to save up for a deposit. Saving a 5% deposit gives you a better chance of being accepted and could help you get a 5% shared ownership mortgage. You will have more choice of mortgage rates if you are able to save up a deposit of 10% or more. The higher the deposit the more security you have. A 0% deposit mortgage puts you at risk of negative equity.
Can I get a no-deposit interest only mortgage?
No, you always need a deposit or equity in your current home to get an interest-only mortgage. Interest-only mortgages are considered riskier. A full repayment mortgage means you pay off the equity as well as the interest.
Can I get a no-deposit buy-to-let mortgage?
No, you always need a deposit to get a buy-to-let mortgage. Most require at least a 20% deposit.
Does my credit record matter when getting a no-deposit mortgage?
Yes, your credit record does matter. Lenders want to see proof of your ability to keep up your mortgage repayments. They will review your spending habits and assess your affordability, which may impact how much you can borrow. Here is more on why your credit record matters.
Can I get a no-deposit mortgage with bad credit?
You usually need at least a 15% deposit to get a bad-credit mortgage. Compare deals here if you have bad credit. You may be able to get a mortgage if you have a guarantor.
Can I afford a no-downpayment mortgage?
Check if you can afford one by working out how much you earn and spend. Compare this to how much buying a home will cost you.
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