Struggling to Buy Your First Home? A No-Deposit Mortgage Could Be the Answer

For many people, the hardest part of buying a first home isn’t finding the right property—it’s saving the deposit. With house prices rising and rent costs often leaving little spare cash, getting together a substantial deposit can feel out of reach.

If you’re in that position, or you’re supporting a child or grandchild who is, a no-deposit mortgage (often described as 100% LTV) may be worth understanding. In simple terms, it’s designed to help eligible first-time buyers purchase a home without needing to put down an initial deposit.

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

A no-deposit mortgage is a home loan where the borrowing amount is 100% of the property’s value. Instead of paying a deposit upfront, the mortgage covers the full purchase price (subject to the lender’s rules and underwriting).

Because the loan-to-value ratio is higher than with a typical mortgage, lenders generally treat these applications with extra care—especially around affordability and the likelihood of the mortgage remaining sustainable over time.

How a no-deposit mortgage can work

Some no-deposit mortgages are structured to help make repayments more predictable and to reduce the loan-to-value over time. For example, a product may include a fixed-rate term and features that are intended to improve predictability.

Common features to look out for include:

• Long-term fixed rates: A fixed interest rate for a set period (for example, a 10- or 15-year term) can help make monthly payments easier to plan.
• Potential changes as you repay: As you make payments, your loan balance reduces and your loan-to-value ratio can fall. Some products may be designed so the interest rate can reduce at certain milestones, but this depends on the specific mortgage terms.
• Overpayment flexibility: Some no-deposit mortgages allow overpayments (the exact limits and whether they are “unlimited” vary by product).
• Early repayment terms: Some products may allow you to repay or move without early repayment charges in certain scenarios, but this is not universal—always check the mortgage offer and key features.

The exact details vary by lender and product, so it’s important to review the specific terms that apply to the mortgage you’re considering.

Who these mortgages are typically designed for

No-deposit mortgages are usually aimed at borrowers who can demonstrate that they can afford the repayments, even without a deposit.

While criteria vary, a product like this may be designed for:

• First-time buyers who have struggled to save a deposit
• UK resident applicants within a defined age range (including limits at the end of the mortgage term)
• Household income meeting a minimum threshold
• Purchases of houses (some products may not apply to flats or certain property types)
• Property value above a minimum purchase price

It’s also common for lenders to require that the mortgage is for a main residence and that the borrower can pass a credit check and a full affordability assessment.

All applications are subject to the lender’s underwriting and suitability checks.

The key risks to consider

A no-deposit mortgage can open the door to homeownership, but it also comes with risks that are important to understand before committing.

1) Negative equity risk

With a 100% loan, if property values fall, there’s a greater chance of negative equity—where the mortgage balance is higher than the value of the home.

This can make it harder to:

• sell the property without bringing extra funds
• remortgage later if the lender’s criteria require a lower loan-to-value

2) Higher sensitivity to affordability

Because the loan is larger relative to the property value, lenders will focus heavily on whether repayments are sustainable.

Even if you can afford the mortgage now, it’s worth considering how your circumstances could change over time (for example, income changes, interest rate changes after the fixed period, or additional household costs).

3) Upfront buying costs still apply

A no-deposit mortgage doesn’t remove all the costs of buying a home. Even without a deposit, you may still need to budget for items such as:

• stamp duty (where applicable)
• solicitor and conveyancing fees
• valuation and survey costs
• moving expenses

How to think about whether it’s the right option

A no-deposit mortgage may be suitable where:

• you can demonstrate affordability for the full term
• you’re comfortable with the potential impact of property price movements
• you’re prepared for the ongoing costs of homeownership (not just the mortgage repayments)

It can also be helpful to compare the overall picture against alternatives, such as saving a deposit for a lower LTV mortgage or considering other routes to getting on the ladder.

Supporting family members: a no-deposit mortgage can be part of the plan

For parents and grandparents who want to help, a no-deposit mortgage can sometimes be one piece of a wider strategy—particularly where the main barrier is deposit savings.

In practice, support may also include helping with budgeting for the non-deposit costs of purchase, or planning for the mortgage term so the borrower can maintain repayments comfortably.

Final thoughts

A no-deposit mortgage can be a powerful option for first-time buyers who can’t currently save a deposit, but it’s not a decision to take lightly. Understanding the product features, the affordability assessment process, the risk of negative equity, and the buying costs that still apply will help you approach the next steps with clarity.

If you’re exploring this route, the most important starting point is ensuring the mortgage you choose fits your long-term financial position—not just your ability to secure the keys today.