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No Deposit Mortgages

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: September 27, 2021

If you’re after a mortgage but have no deposit saved, you certainly may be able to borrow the entire cost of a property’s purchase price without a deposit.

Getting on the property ladder can be difficult, with the most common issue being the struggle to save a large sum of cash for a deposit. Many people approach us to ask whether they are able to get a mortgage without a deposit, and it’s definitely a possibility.

No deposit mortgages are more common than many people realise, and nowadays there are a vast number of options available to you as a buyer to give you a helping hand.

So, if you’re struggling to save, read on to find out how to get a mortgage without a deposit.

How do no deposit mortgages work?

An important point to be aware of is that “no deposit” does NOT mean a 100% mortgage. To be clear, 100% mortgages (i.e. using one provider to lend 100% of the purchase price with no other equity/security) are not currently available in the traditional sense, but there are ways of getting a mortgage without using cash as a deposit.

Deposits are calculated as a percentage of the property’s value, paid for with money you have saved up. A mortgage will then cover the rest of the purchase price.

For example, if you bought a house for £180,000 and paid a 15% deposit you would be contributing £27,000, with the remaining £153,000 covered by a mortgage. This mortgage would have a loan-to-value (LTV) ratio of 85% because it would cover 85% of the cost of the property.

To get the right advice on a mortgage to suit you, make an enquiry and one of the experts will be in touch to go through all your options.

Can I get a 100% LTV mortgage?

With the above in mind, it would make sense that a zero per cent deposit has an LTV of 100%, so the entire cost of your home would be covered by a mortgage.

However, in today’s market, getting a mortgage with no cash to put down as a deposit is not something mortgage lenders will offer.

Thankfully, there are various options available using alternative means, as discussed below

What are the risks of 0% deposit mortgages?

The smaller your deposit, the more expensive it is to get a mortgage. Lenders see low deposits as far riskier investments, which means that you will have considerably fewer lenders to choose from. As such, you will not have access to the most competitive interest rates and are likely to be subject to higher application fees and lending charges.

In addition, there is the risk that you could end up in negative equity. For example, if you borrowed £150,000 for a mortgage with no deposit, you would owe the full £150,000 to the lender, as well as the interest and any other fees.

If the property value dropped to £130,000, it would then be worth less than the amount you owe, and if you needed to sell to match the amount you initially borrowed, you would not be able to pay off your mortgage in full.

This is why mortgage lenders in the UK will not authorise 100 percent LTV / no deposit mortgages. Instead, there are different ways of buying a property without a deposit that still provides lenders with some additional security.

Can I get a no deposit mortgage in Scotland?

You may be aware that there are some different rules around buying property in English and Scottish law, but fortunately for buyers North of the border, there are no significant differences in lending practices, and “no deposit” mortgages are available in Scotland as they are in most other parts of the UK.

However, as in the rest of the UK there are also no true 100% mortgages in Scotland currently: you will still need to offer some form of security in lieu of a cash deposit to be accepted by a lender.

If you have previous bad credit, you may need a higher deposit depending on when the bad credit was registered and how severe the bad credit is, a bad credit mortgage broker will be able to guide you through your application and find the best mortgage lender for your situation.

What options are available for 0% deposit mortgage seekers?

Using a personal loan as a mortgage deposit

Taking out a loan to qualify for an even larger one in the form of a mortgage is frowned upon by lenders, and many will not consider you at all. Generally, this comes down to the impact of affordability that taking a loan AND a mortgage may have, but mostly is because the borrower has not personally saved money in the game. As a result, they are considered a higher risk.

That said, there are one or two lenders happy to consider in the right circumstances.

If you can prove that you are able to afford the mortgage repayments as well as your other loan(s), bills and outgoings, you may stand a chance.

If it is apparent that you can’t afford a mortgage – let alone a deposit – when they assess your outgoings, it’s another matter. In addition, lenders will check your credit file to ensure you have a clear history before confirming.

It may be possible to do this with a 5% loan and 95% mortgage, 10% loan and 90% mortgage, or even 15% loan and 85% mortgage. Bear in mind that larger loans are less common as the max you can borrow on a personal loan is £25,000, and the maximum term is usually 7 years, making repayments higher than if they were over the full term of the mortgage.

Guarantor mortgages

Guarantor mortgages can help you get on the property ladder if you have a family member or close friend who is willing to help you out by securing the loan against a property they hold equity in, or their savings.

Some lenders will offer 100% mortgages if you have a guarantor who is willing to support you. This can be done by securing the loan against a property they own and hold equity in, or by placing funds equal to the required deposit amount in a savings account held by the mortgage provider.

Can my guarantor’s savings account serve as a deposit for a “100% mortgage”?

Possibly. The lender will expect your guarantor to place money in a savings account they hold. They cannot access these funds until a time set by the lender, or until a certain amount of the mortgage has been paid off.

Our guide to guarantor mortgages has more information on this.

Using credit cards

Typically, credit cards cannot be used for a mortgage deposit itself. However, by exception, there may be lenders willing to consider using a credit card to top-up a cash deposit if short of the amount required, providing the card balance is affordable.

Although it is extremely rare that a borrower would use a credit card to fund a deposit for their own home, some people will opt to increase their day-to-day credit card spending in order to save more disposable income towards a cash deposit.

This way, over time the deposit is in cash savings, and the debt is on a credit card, rather than savings spent. So long as the balance doesn’t get out of hand and results in the new mortgage being unaffordable at the point of application, of course.

As with personal loans, the amount of credit debt you’ve racked up will be assessed by potential lenders, and once again it will all depend on your affordability – whether you are able to make the mortgage repayments alongside this additional credit card debt, plus any other outgoings.

Again, it’s unlikely that you’ll be offered the best rates and this method could also inhibit the amount you are allowed to borrow.

Using a gifted deposit

gifted deposit is when somebody (usually a family member or friend) gives a sum of money towards a buyer’s deposit. This contribution must be a gift, and lenders will require signed documentation confirming the donor’s name, the relationship to the buyer, the gift value, and a statement confirming the giftee is under no stipulation to repay.

Family gifted deposits are the most commonly accepted by lenders, especially when it comes to 0% deposit mortgages, but there are several others that may be accepted in certain instances:

Vendor gifted deposits

Vendor gifts are actually in the form of equity, and this is when a vendor offers a buyer a property at a discounted price.

For example, a house may be on the market for £200,000 but the vendor may offer to sell at £180,000 (10% discount) for a quick sale. The £20,000 discount is 10% of the value of the property, which may then be used as 10% of the buyer’s deposit.

Developer gifted deposits

Developer deposits are also an equity gift, which is a very similar concept to vendor gifted apart from the fact that the “gift” will be offered to the buyer by the builder or developer, but it’s restricted to new builds.

However, it’s unlikely the developer will offer a discount of over 10%, and as new builds are typically seen as higher risk, lenders will usually require a minimum of 15%–20% deposit. If you’re after a cheap mortgage with no deposit, developer gift is probably not the right road to go down.

Landlord gifted deposits

landlord gift is again in the form of equity. It’s where a buyer purchases a property from the landlord at a discount purchase price, whereby the discount acts as the deposit.

Family gifted deposits

Lots of parents contribute some or all of a deposit to help their children buy their first home. It’s a good solution if the buyer is struggling to save a lump sum for a deposit but is confident that will be able to afford the mortgage repayments.

Direct family such as parents, siblings and grandparents are usually accepted without question by lenders, but there can be stricter rules around distant family giving gifts.

If you’re fortunate enough to receive a deposit gifted by family, this is a pretty good way to get on the ladder with a 0 deposit mortgage, provided your credit history is clean. However, you will be looked at far more favourably if you make your own financial contribution on top of the gift.

Vendor, developer and landlord gifted equity is typically regarded with a lot more caution, and as such fewer lenders are willing to accept them, especially if you’re after a zero deposit mortgage.

For example, lenders will want to ascertain that the true market value of a property matches the original asking price before the discount was made. In almost every case, lenders will also want the buyer to match or at least contribute to the gifted deposit to prove their commitment to the investment.

If you like this idea, in theory, but aren’t comfortable accepting such a substantial gift from your family, you could consider using a springboard mortgage. This way, instead of paying a deposit, your parents, or other close family members, place an agreed sum of money into an account with the mortgage provider. After three years your relative gets their money back with interest, as long as you’ve maintained the mortgage payments.

Government schemes to help you raise a deposit

Depending on your situation, you may be eligible for help from the government. If you’re seeking a no deposit mortgage, there are a couple of flexible schemes out there which are very good to know about. These are often aimed at first-time buyers.

What are the best no deposit mortgages for first-time buyers?

The following schemes can help first-time buyers get a mortgage with little or no deposit, although that isn’t to say the initiatives mentioned below are exclusively for first-time buyers.

100% Shared Ownership mortgages

Shared ownership mortgages are part of a popular government scheme which helps lower-income households (<£60,000 combined income a year) and first-time buyers purchase a property. You can take out a mortgage for the share you own, which is usually between 25%–75% while paying reduced rent on the remaining proportion. This means that you will have a much smaller mortgage, and therefore need to save a far smaller deposit. For example, for a property which is valued at £150,000, the breakdown may be as such for a minimum 10% deposit required:

Mortgage Type Property Share Deposit Required
Standard 100% £15,000
Shared Ownership 75% £11,250
Shared Ownership 50% £7,500
Shared Ownership 25% £3,750

To pay for your share of your home, you can either use cash or take out a mortgage.

Most mortgage lenders will require a minimum deposit of 5%–10%, however, there are a few lenders out there that offer 100% mortgages on shared ownership properties, meaning you may be eligible for a mortgage with no deposit at all.

Shared Ownership in Scotland

Scotland has its own set of government-backed initiatives to help prospective homeowners on to the property ladder, including a shared ownership scheme that works in much the same way as the model described above, with priority being given to council or housing association residents. See the Money Advice service for more information on shared ownership in Scotland.

100% Right to Buy mortgages

The Right to Buy scheme helps eligible council and housing association residents in England buy their home with a significant discount. The exact amount will depend on how long you’ve lived in this accommodation, what type of property you live in, and its market value.

Discount levels start at three years of eligible tenancy, increasing to a maximum of 70% of the property value. Regardless of how long you have lived in your home or how much it’s worth, the maximum discount allowed through Right to Buy is £77,900 (or £103,900 in London):


The longer you’ve lived in council/housing association accommodation, the larger the discount you could get off of the market value of your home. NB Discounts for houses and flats are calculated differently.

For example:

Buying a house
Current Value £120,000
Years of Residence 10 Years
Eligible Discount 40% (35% + 1% for each year over 5 years)
Discount Value £48,000
Price you pay for property £72,000
Buying a house in London
Current Value £230,000
Years of Residence 20 Years
Eligible Discount 50% (35% + 15%)
Discount Value £103,900 (50% discount = £115,000 which exceeds cash maximum
Price you pay for property £126,100
Buying a Flat
Current Value £100,000
Years of Residence 10 Years
Eligible Discount 60% (50% + 2% for each year over 5 years.)
Discount Value £60,000
Price you pay for property £40,000

Buying your home via Right to Buy is very similar to the normal process in that you will still need to apply for a mortgage unless you can afford to purchase the property outright. However, many lenders will allow you to use your Right to Buy discount as your deposit, meaning you can potentially get a mortgage without paying any deposit yourself.

For example, if your home costs £100,000 to buy and the maximum discount is applied to 70% of the value, then the purchase price will be £70,000. The discount has essentially contributed a deposit of 30%, and there are some lenders that will allow a 100% (nil deposit) mortgage on this £70,000.

Borrowing Over 100% on Right to Buy mortgages

There are even a handful of lenders that will loan an additional 10% to help towards other costs associated with buying a property. So, in this case, you could get a full £70,000 nil deposit mortgage plus an extra £7,000. However, this is quite rare and you may be open to more favourable rates if you also contribute to the discount out of your own pocket.

Help to Buy mortgages

Although not 100% deposit-free, Help to Buy can make it a lot easier for you to get a better rate mortgage with as little as a 5% deposit saved. This scheme provides you with an equity loan that lets you borrow money for an interest-free deposit for five years, for up to 20% of the property’s value (40% in London).

You then put down the 5% of your own cash and take out a mortgage for the rest. With a potential combined deposit of up to 25%, you will then have access to far more attractive mortgage rates from participating lenders.

Buyers are able to repay this equity loan at any time without incurring any charges. You can either repay 10% or 20% of the total about, provided the loan is worth a minimum of 10% of the value of your home.

If you don’t repay the loan while you’re still living at the property, when you sell the government will reclaim its 20% stake at the property’s current value. So bear this in mind.

Help to Buy is open to both first-time buyers and home movers, and there is no maximum income requirement. However, it is restricted to new-builds, and the value must not exceed £600,000.

The property must be the buyer’s only residence, and may not be used to purchase a buy to let (BTL), and of course, you will need to prove you can meet the mortgage lender’s criteria.

Are there any 100% Help to Buy mortgages available?

Not currently. However, there are options for those borrowing their 5% Help to Buy deposit on a personal loan.

Other circumstances affecting eligibility on deposit free mortgages

As ever, there are many other factors that can either assist or inhibit your chances of being accepted for a mortgage with no deposit.

As we’ve established, getting a mortgage without contributing some of your own cash to the deposit is tricky enough, let alone if there are other factors counting against your favour. Some of the most common are:

Being Self-Employed

Typically, for a self-employed mortgage, you will need at the very minimum a year’s worth of accounts to be considered by a limited number of lenders. If you have 3+ years’ worth of accounts that can prove you’re able to comfortably cover the repayments and your other outgoings, you will be looked at a lot more favourably by lenders.

Bad Credit

As with all bad credit cases, it depends on the individual circumstances but it can affect getting a mortgage with no deposit.

The following bad credit mortgages might still be available:

However, your chances of getting a poor credit mortgage really depend on the severity of the issue(s).

For example, a low credit score or late payments are less severe than repossession and bankruptcy. The date they were registered are also significant; more recent they occurred, the harder it is to get approved for if it was an instance from years ago.

Loan as a deposit

There are currently very few lenders who consider loans for a deposit, particularly if you have a history of bad credit. With both issues to contend with the number of lenders who’d approve your loan would be limited to a small handful. That said, it’s not impossible.

Typically, these will be specialist lenders that require a higher deposit in general, so you may need 25% regardless. if this is affordable on a personal loan, or by using cash and some loan, then there may still be options for you, even with severe credit issues.

Help to Buy

There are several lenders offering the 75% mortgage alongside the Help to Buy equity loan and 5% deposit, even if you have a history of bad credit. In these instances, depending on the credit issue, you would likely need the 5% deposit as your own savings as a minimum.

Right to Buy

Several of the lenders considering Right to Buy mortgages will allow adverse credit, again depending on the date and type of the issues. Some of them will stipulate a minimum of 5% deposit where others are happy to lend to 100% of the discount purchase price.

Non-Standard construction types and no deposit

Non-standard constructions are typically seen as riskier investments, which means fewer willing lenders and less competitive rates.

Those who do consider will usually require a far larger deposit for non-standards builds, and if you haven’t contributed anything to the deposit yourself, it’s unlikely that you’ll be accepted as there is no way of proving your commitment to an already risky investment.

Buy to Let mortgages

Most lenders require at least 25% deposit for a BTL property, where some will accept 20% and a handful can consider just 15%. If you manage to generate the required deposit through other means such as a gift but have paid nothing yourself, lenders will want to know why, but it is possible.

The only real way of buying a buy to let with no deposit would be to finance it with a personal loan, although the number of lenders considering this is extremely limited. Other than that, you’d need to raise capital against another property, and if you don’t own any other assets then this is not likely to be possible.

It’s worth noting here that those looking to purchase a second home are not eligible for government schemes such as Help to Buy.

If you’d like further no deposit mortgage advice, call us on 0808 189 2301 or make an enquiry and we’ll be in touch soon for a no-obligation, free initial chat to ensure we find the most suitable advisor for you. The experts we work with are ideally placed to advise on your best options for getting a no deposit mortgage, whatever your circumstances.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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