Could a 100% mortgage help your kids buy a home without a deposit?

A growing number of first-time buyers are finding that saving a deposit is the hardest part of buying a home. With house prices and living costs putting pressure on household budgets, the idea of a 100% mortgage—where the borrower doesn’t need to put down a deposit—can sound like a breakthrough.

Some lenders have offered no-deposit mortgage products that allow eligible borrowers to borrow up to 100% of the property value (subject to the lender’s valuation and affordability checks).

What is a 100% (no-deposit) mortgage?

A 100% mortgage is designed to fund the purchase price without a deposit from the buyer. In practice, that means the mortgage amount is typically set at the full value of the property as assessed by the lender (subject to their rules and affordability assessment).

Some newer 100% products are structured to support longer-term affordability, for example by using fixed-rate periods and product features that may help reduce payment shock over time. The exact approach depends on the specific product.

How it may work (in broad terms)

While each lender’s product details differ, a no-deposit mortgage of this type may include features such as:

• Fixed interest for an initial period (for example, a fixed term such as 10 or 15 years), which can help borrowers budget for monthly payments.
• Potential changes to the interest rate over time as the loan-to-value (LTV) improves (for example, if the balance becomes a smaller proportion of the property’s value).
• Flexibility for overpayments (where available), which may allow borrowers to reduce the mortgage balance faster if their circumstances allow.
• Early repayment terms that vary by product (for example, whether early repayment charges apply and in what circumstances).

Who is it aimed at?

These products are generally aimed at first-time buyers who:

• have struggled to save a deposit
• can meet the lender’s eligibility and affordability requirements
• can pass the lender’s credit assessment
• are buying a property that fits the product’s criteria

In some examples discussed in the market, the product is described as being for home purchases only and must be used to buy the borrower’s main home. There may also be property-type restrictions (for example, houses rather than flats) and minimum property value requirements.

Because eligibility can be specific to the product, it’s important to check the exact criteria for the mortgage being considered.

Could it help you support your children (or grandchildren)?

A 100% mortgage can be relevant for families where the main barrier is the deposit.

However, it’s important to separate:

• Deposit funding: a no-deposit mortgage may remove the need for a deposit.
• Total buying costs and affordability: buyers still need to budget for costs such as stamp duty, solicitor fees, valuation costs, and moving expenses.

Even where a deposit isn’t required, lenders will still assess whether the borrower can afford the mortgage payments now and over the longer term.

Key risks to consider with 100% lending

No-deposit mortgages can be helpful, but they also come with risks that are worth understanding before anyone commits.

1) Negative equity risk can be higher

With a 100% loan, the borrower starts with little or no equity. If property values fall, it’s possible for the mortgage balance to be higher than the property’s value, which can make it harder to move or remortgage in future.

2) Affordability still matters—underwriting is still required

Even if the deposit hurdle is removed, lenders will still carry out affordability checks. Income, existing commitments, credit history, and spending patterns can all affect whether the mortgage is offered.

3) The “no deposit” story doesn’t remove all costs

Buyers may still need funds for purchase-related expenses. If those costs aren’t planned for, the overall financial pressure can be significant.

What to check before assuming it’s the right fit

If you’re considering whether a no-deposit mortgage could be relevant for a family member, the most useful starting points are:

• whether the buyer meets the lender’s eligibility rules (for example, age, residency, income, credit)
• whether the property type and value match the product criteria
• whether the buyer can comfortably cover ongoing payments and all upfront costs
• how the mortgage is structured over time (for example, fixed period length and what happens when the rate changes)

The bigger picture for first-time buyers

For first-time buyers, a deposit is often the biggest obstacle—but it isn’t the only one. A 100% mortgage may reduce the deposit barrier, yet it still requires careful budgeting and a clear understanding of how the mortgage will perform over the long term.

If you’re helping someone close to buying, it can be valuable to look at the full financial picture—not just the headline “no deposit” feature—so the mortgage choice aligns with their circumstances now and in the years ahead.

Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.