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No Deposit Mortgage (Part 1)

Charlie Connolly explains how a no deposit mortgage works. Episode one of two, recorded in September 2025.

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

Buying a house with no deposit is possible in some cases, but it typically comes with criteria points to meet – and also higher risk. A no deposit mortgage is a 100% Loan to Value mortgage, so you don’t put down a deposit.

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

It’s no different to the usual mortgage, but instead of the typical requirement to contribute a percentage of the property’s value as a deposit, the lender finances the full 100% of the purchase price.

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

As we speak today in September 2025, the most well-known lender to offer a no deposit mortgage is Skipton Building Society.

Can first-time buyers get a no deposit mortgage? Who is eligible for a no deposit mortgage?

Yes, potentially first-time buyers can get a no deposit mortgage in some situations. However, these types of mortgages are not common and tend to be quite niche. The lender choice is still quite restricted for this type of mortgage, too.

Do I need a guarantor for a no deposit mortgage?

It depends on the lender and your specific situation. In many cases, lenders require a guarantor to back the loan if you’re not putting down a deposit. This is because no deposit mortgages are considered higher risk for the lender.

The guarantor usually agrees to pay off a loan if you’re unable to pay, or they provide extra security. However, some lenders such as Skipton offer no deposit mortgages without requiring a guarantor.

These are less common and often come with higher interest rates. You may also need to meet stricter criteria like a higher income or a very strong credit score.

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

It’s hard to say exactly what credit score you would need, as each lender would consider a different level of risk. If you have bad credit, it would become much harder, as a 100% mortgage is more risky for the lender. They generally want to see a very good track record of reliable borrowing.

Do I need a family member to support my application for a no deposit mortgage?

It depends on the specific lender and product you’re applying for. With a guarantor mortgage, family members would have to support your application.

Are there income requirements or limits?

Income requirements can vary from lender to lender. Some lenders may have specific income eligibility criteria, especially with it being a 100% mortgage. We would directly check that with a lender prior to submitting anything.

Are no deposit mortgages backed by government schemes?

No deposit mortgages are typically not directly backed by government schemes. However, there are government backed programmes and schemes that can help people secure a mortgage with little or no deposit, such as the shared ownership mortgage scheme.

What else is there to highlight before we return with part two?

A mortgage broker can add value with this type of mortgage, because we’ve got the expertise and we know which lenders to approach. We’re here to point you in the right direction.

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The biggest compliment we can have as a broker is when you refer us to your friends or reuse us. It means you’re happy with the service we’ve provided and how we look after your finances.

No Deposit Mortgage (Part 2)

Continuing the conversation on no deposit mortgages with Charlie Connolly. Episode two of two, recorded in September 2025.

Are interest rates higher on no deposit mortgages?

Yes, interest rates are often higher on no deposit mortgages compared to those with a deposit. This is primarily down to the fact it’s higher risk, due to the lack of security.

Normally a deposit serves as a buffer for the lender, ensuring that if things go wrong, the deposit can cover a portion of the loss. Without this, lenders may want to protect themselves by charging higher interest rates.

How much can I borrow with a no deposit mortgage?

The amount you can borrow with a no deposit mortgage depends on a few factors including your income, your credit score and the lender’s specific criteria.

Do I need to pay extra fees?

Typically these mortgages don’t require a deposit, but you may still face other costs or fees. You’ve potentially got arrangement fees, as many lenders have an upfront charge for setting up the mortgage. That can range from a few hundred pounds to a couple of thousand.

There are also products available without fees, but they typically come with higher interest rates. In addition, lenders often require a valuation of the property to ensure its value is sufficient to cover the loan. The size of this fee can vary from lender to lender.

Then we’ve also got legal fees. A solicitor or conveyancer needs to handle the legal side of things and those fees would cover that.

Are repayments higher on a no deposit mortgage?

Yes, the repayments are normally higher on 100% or no deposit mortgages compared to a mortgage where you do put a deposit down.

For example, if you purchase a property for £250,000 with 10% deposit, you only need to borrow £225,000. With a 100% mortgage, you’d be borrowing £250,000, so naturally, your repayments are going to be higher.

You’re also likely to have higher interest rates on a 100% mortgage compared with a 90% Loan to Value mortgage.

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

Yes, and the risk is actually higher compared to someone who has a deposit of 5% or more, because you have no equity cushion.

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

Some risks include negative equity, which we briefly just touched on. With no equity buffer, even a slight fall in house prices could leave you owing more than the property is worth.

We’ve also got limited lenders, as very few at the moment [in September 2025] offer 100% mortgages. That may change in the future, but as it stands, there are very few options.

You will also have higher interest rates and repayments, which is also something to consider. It could potentially be harder to remortgage – if house prices don’t rise as much as you would like, you may struggle to switch to a better mortgage deal at the end of your fixed term.

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

There are a few alternatives, such as saving for a low deposit mortgage. Many lenders now offer 90% to 95% Loan to Value mortgages. Interest rates on these are usually lower than with a 100% mortgage, and there are more lenders to choose from.

You’ve also got guarantor and family assisted mortgages, where a parent or a close family member guarantees your repayments with schemes such as Family Boost or Deposit Boost.

Finally, we’ve got shared ownership. This is where you buy a share of a home and pay rent on the rest. Because you’re only purchasing a share of the property, the deposit and mortgage should become more affordable – you only have to put in a smaller amount [information correct at the time of recording in September 2025].

Can I switch to a different mortgage later?

Yes, you’re able to switch to a different or a new mortgage later. If you do go with a no deposit mortgage, once your fixed rate ends you should have options available for a remortgage.

How can a mortgage broker help? Have you got anything else you’d like to add?

I think a broker like us could add real value if you were to go down this route. We’re able to guide you in the right direction. We’ll make you aware of the risks involved in this type of mortgage, and we have a bank of knowledge around the lenders that can potentially help you buy a home with no deposit.