No Deposit Mortgage (100% LTV): How They Work, Who Qualifies, and the Risks in 2025

Scraping together a five-figure deposit can feel like trying to sprint in treacle. That’s why the idea of a no deposit mortgage, borrowing 100% of a property’s value, is so compelling. In 2025, these products exist again, but they’re not a free-for-all. They’re tightly controlled, aimed at specific borrowers, and come with risks you should weigh carefully. Here’s what you need to know before you jump in.

What is a 100% Mortgage?

A 100% mortgage (also called a no deposit mortgage or 100% LTV mortgage) lets you buy a home without putting down any of your own cash as a deposit. You borrow the entire purchase price.

In practice, that means you’ll need to pass stricter affordability checks, because the lender is taking on more risk. You’ll also still need money for the other bits that come with buying a home, solicitor’s fees, a survey, moving costs, and possibly stamp duty (many first-time buyers pay none, depending on price, but check the current thresholds).

These mortgages were common before the financial crisis, then largely disappeared. Today’s versions are deliberately cautious, often aimed at renters who can prove they’ve consistently paid rent at or above the proposed mortgage payment.

Do Any Banks Still Offer 100% Mortgages?

Yes, but only a handful, and the criteria are strict. As of 2025:

• Skipton Building Society offers a 100% mortgage targeted at tenants with a strong track record of paying rent on time. Their product has evolved since launch, with fixed-rate options and gradually widened property criteria.
• April Mortgages has come to market with 100% mortgages, including long fixed-rate deals (think decade-long fixes) aimed at giving payment certainty, helpful when you’ve no equity cushion.

You’ll find a few other niche lenders in the mix from time to time, but this isn’t a crowded space. Expect lenders to focus heavily on stability: provable rental history, clean credit, solid employment, and affordability that stands up even when rates are stress-tested. It’s also common to see caps on maximum loan sizes and property types.

Because availability shifts, it’s worth speaking with a whole-of-market broker who knows which lenders are actively offering 100% LTV at the moment and which criteria actually pass underwriting, not just headline marketing.

Once I’m Accepted for a 100% Mortgage How Does It Work?

Mechanically, it’s similar to any other mortgage. Your lender agrees a loan for the full property value, you instruct a solicitor or conveyancer, and the lender releases funds at completion. From there:

• Your monthly repayments begin immediately, based on your fixed or variable deal.
• You’ll cover purchase-related costs (legal fees, valuation/survey, searches, moving, furnishings). Budget for these early so completion isn’t derailed.
• Over time, as you repay and (hopefully) as the property value rises, you build equity. But in year one, you start at 0% equity, so protecting your position matters.

Tip: set aside an emergency fund so a boiler breakdown or car issue doesn’t send you scrambling. With no deposit, your margin for error is smaller.

Can I Get a No Deposit Mortgage as a First-Time Buyer?

Yes, first-time buyers are a core audience for current 100% mortgage products. Lenders will look for:

• A documented history of paying rent reliably, typically for 12 months or more.
• Affordability that shows your income can comfortably cover the mortgage under stress tests.
• A strong credit profile and evidence of responsible money management (low unsecured debt, no recent missed payments).

You might also see rules such as no recent homeownership, restrictions on gifted deposits (irrelevant here, but still referenced in criteria), and minimum property values. If you’re borderline on affordability, consider whether a slightly lower purchase price puts you in a safer spot and broadens your lender options.

What Types of Home Can You Buy with a 100% Mortgage?

Lenders tend to be choosy about property types at 100% LTV. Historically, many excluded new-builds and certain flats because price swings can be sharper. Criteria have loosened a touch, for example, Skipton’s later iterations allowed some flats and new-builds, but expect rules around construction type, property condition, and lease terms.

Common themes:

• Standard construction houses are usually easiest.
• Leasehold flats may face stricter criteria (minimum lease length, service charge levels, building height).
• New-builds might be allowed on a case-by-case basis, often with tighter valuation scrutiny.

If your dream home is a quirky build or high-rise flat, check with a broker before you fall in love.

Advantages of 100% Mortgages

• Get on the ladder sooner: You don’t need years of saving and can redirect rent into ownership.
• Keep your cash: Savings can stay in your emergency fund or go towards essential improvements.
• Predictability (with fixes): Long fixed-rate options can make budgeting simpler when you’ve no equity buffer.

Disadvantages of 100% Mortgages

• Higher interest rates: You’ll usually pay more than someone with a 10% deposit.
• Limited choice: Few lenders, tighter criteria, and stricter property rules.
• Negative equity risk: If prices dip, you could owe more than the property is worth, making it hard to move or remortgage.

The Risks of Negative Equity If You Take Out a 100% Mortgage

Negative equity happens when your outstanding mortgage exceeds your home’s market value. At 100% LTV, your equity starts at zero, so even a small price fall can put you underwater. Why it matters:

• Moving becomes tricky: Selling wouldn’t clear the mortgage, so you’d need to inject cash to complete the sale.
• Remortgaging is harder: If you’re in negative equity at the end of a fixed period, your choices may be limited and more expensive.
• Life happens: Job changes, family moves, or repairs don’t wait for the market to recover.

How to reduce the risk:

• Consider a longer fix if it suits your plans. It buys time for equity to build through repayments and potential price growth.
• Aim for a conservative price point, not the very top of what the lender will allow.
• Overpay when you can (check penalties). Small, regular overpayments chip down the balance faster.
• Plan to stay put for a while. 100% LTV works best if you don’t need to sell quickly.

Negative equity isn’t guaranteed, markets move both ways, but you should go in with eyes wide open and a plan B.

What Are the Alternatives to a 100% Mortgage?

If a no deposit mortgage isn’t a fit or you’re not eligible, you’ve still got routes onto the ladder:

• Guarantor or family-assisted mortgages: A parent’s savings or property may be used as security. You still borrow at high LTV, but the lender takes comfort from the additional backing. Understand the risks to the family member.
• Shared ownership: You buy a share (e.g., 25%–75%) and pay rent on the rest. The deposit and mortgage needed are smaller, and you can often “staircase” up over time.
• First-time buyer schemes: Various regional or developer incentives exist, and some lenders offer enhanced affordability for key workers or renters with proven payment history.
• Save for a deposit: Not exciting, but even 5% opens up many more lenders and often a noticeably lower rate. Use a dedicated savings account, consider a Lifetime ISA for the government bonus if eligible, and automate contributions.

Run the numbers side-by-side. Sometimes a year of aggressive saving unlocks a 5–10% deposit that dramatically improves your choice and long-term costs.

Your Credit Score Plays a Part in the Offer You Get

With a 100% mortgage, your credit profile gets extra scrutiny. Lenders want to see that you handle commitments well because they have no deposit as a buffer. You can strengthen your position by:

• Paying every bill on time (a single missed payment can sting for years).
• Reducing credit card balances and avoiding new borrowing before application.
• Checking your reports with the main UK credit reference agencies and fixing errors.
• Getting on the electoral roll at your current address.
• Demonstrating stable income and employment: probation periods can be a hurdle.

A better score won’t just improve your chances, it may also secure a lower rate. If your file needs work, give yourself a few months to tidy things up before you apply.

Bottom line: a no deposit mortgage can get you the keys sooner, but it’s not the cheapest route. Treat the application like a pitch, clean finances, realistic budget, and a clear plan for building equity once you’re in.

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