Can first-time buyers get a mortgage with no deposit?

Can first-time buyers get a mortgage with no deposit?

For many first-time buyers, the deposit is the biggest barrier. Even if you can afford the monthly mortgage payments, saving a lump sum can be difficult when rent, bills and everyday costs are already stretching your budget.

A no-deposit mortgage is sometimes described as a 100% loan-to-value (100% LTV) mortgage. In simple terms, it’s a way to borrow the full purchase price without putting down a deposit.

This guide explains what no-deposit mortgages are, how they’re typically assessed, the potential advantages and downsides, and the alternatives that may help you get onto the property ladder with less upfront cash.

What “no deposit” usually means (100% LTV)

A no-deposit mortgage generally means the lender advances 100% of the property’s purchase price.

Instead of paying a deposit to reduce the loan amount, you would:

• borrow the full amount needed to buy the home
• repay the mortgage over the agreed term, with interest
• still plan for the other costs of buying, such as legal fees, surveys/valuations, and stamp duty where applicable

Because the lender is taking on more risk by lending 100% of the value, underwriting is usually strict and the products available can be limited.

How a 100% LTV mortgage may be structured

No-deposit mortgages aren’t one-size-fits-all. Different lenders may structure their 100% LTV options in different ways, but you may see features such as:

• Fixed-rate periods to help you budget (for a set number of years)
• Pricing that reflects the higher LTV, which can mean higher interest rates than lower-deposit alternatives
• Borrowing limits based on affordability, so the maximum loan may be capped depending on your income and outgoings
• Additional requirements in some cases, including the use of a guarantor (where available)

Even when a product is marketed as “no deposit”, it still depends on the lender being satisfied that the mortgage is affordable for you.

What lenders typically focus on

A no-deposit mortgage is often less about “being a first-time buyer” and more about demonstrating that you can manage the repayments.

While exact requirements vary by lender and product, common themes include:

1) Affordability

Lenders will look at your income and your monthly spending to understand whether the mortgage payments are sustainable.

2) Credit history

A strong credit profile can be important when borrowing 100% of the purchase price.

3) Evidence of consistent housing costs

Some 100% LTV products may ask for evidence of reliable rental payment history.

4) Borrowing limits tied to your circumstances

Your maximum mortgage offer may be influenced by your income, existing commitments and the lender’s internal risk assessment.

5) Property constraints

Some lenders may restrict the types of properties they will consider for 100% LTV lending.

Benefits of a no-deposit mortgage for first-time buyers

A 100% LTV mortgage can be attractive if saving a deposit is the main obstacle.

Possible benefits include:

Buy sooner

If you can already afford the monthly payments, removing the deposit requirement may help you purchase earlier than you could if you had to save first.

Budgeting clarity (in some cases)

Where a mortgage includes a fixed rate, it can make your costs easier to plan during the fixed period.

LTV can improve over time

As you repay the mortgage, your loan balance typically reduces. Over time, that can improve your LTV position (though it doesn’t remove the risk if property values fall).

Key risks and trade-offs to consider

No-deposit mortgages can help you buy, but they also come with trade-offs that are worth understanding before you commit.

Higher risk of negative equity

With 100% borrowing, you start with little or no equity. If property values fall, it’s possible for the outstanding loan to be higher than the home’s value.

This can make moving or remortgaging more complicated, especially in the short to medium term.

Potentially higher overall cost

Because the lender is taking on more risk, interest rates and total costs may be higher than mortgages where you put down a deposit.

Product terms may affect flexibility

Some no-deposit options are offered with specific structures (such as longer fixed periods). If your plans change, the mortgage’s terms may influence how easily you can switch.

You still need money for buying costs

Even without a deposit, you may still need funds for:

• valuations/surveys
• legal work
• moving costs
• stamp duty (where applicable)

Is a no-deposit mortgage right for you?

A no-deposit mortgage may be worth exploring if you:

• can comfortably afford the repayments based on your income and outgoings
• have a credit profile that supports your application
• can show evidence of consistent rental payment behaviour (where required)
• understand that you’ll be in a higher LTV position and could face negative equity risk if values drop

It may be less suitable if you’re relying on future changes that aren’t certain, or if you would be uncomfortable with being exposed to higher risk for longer.

Alternatives when you can’t save a deposit

If a 100% LTV mortgage isn’t available to you (or doesn’t feel right), there are other routes that can reduce the deposit barrier. Options depend on your circumstances and the type of home you want to buy.

Common alternatives include:

Lower-deposit mortgages

Instead of aiming for 0%, you may be able to access products with a smaller deposit, which can improve lender choice and pricing.

Shared Ownership (part-buy, part-rent)

Shared Ownership can reduce the upfront purchase amount by letting you buy a share of a property and pay rent on the remaining share. You’ll still need a deposit (typically based on the share you buy), plus you may have service charges depending on the property.

Government-supported routes

Depending on the current schemes available, there may be government-backed options designed to help eligible buyers purchase with a smaller deposit.

Practical considerations before you apply

Before pursuing any no-deposit or low-deposit route, it helps to be clear on:

• the total monthly cost you can afford (not just the mortgage payment)
• your ability to cover buying costs and any ongoing expenses
• how your credit history and spending patterns may affect affordability checks
• whether you’re comfortable with the risks associated with higher LTV lending

Key takeaways

• No-deposit mortgages can exist, but they’re usually assessed carefully and aren’t guaranteed.
• They typically mean a 100% LTV loan, which can involve stricter underwriting.
• The main potential benefit is buying sooner, but the main trade-off can be higher risk (including negative equity) and potentially higher costs.
• Even with no deposit, you still need to budget for other home-buying costs.

If you’re considering a no-deposit mortgage, comparing it against other first-time buyer options can help you choose a route that fits both your short-term goals and your long-term financial comfort.