Updated: March 21, 2022

No Deposit Mortgages

Looking to buy a house with no deposit? It can be done! Find out all of your zero deposit mortgage options & exactly how to get one in our expert guide.

Get Started
Ask A Quick Question

Ask A Quick Question

We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in mortgage deposits. Ask us a question and we'll get the best expert to help.

FCA Logo
1 of 3
£
£
£
2 of 3
3 of 3 Send!

No impact on your credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: March 21, 2022

If you’re unable to access a significant amount of cash for a mortgage deposit, you might be concerned you have no options. But, that’s not the case. It is still possible to get a mortgage and buy a property.

This guide explains the process of getting a mortgage with no deposit. It will also cover the government support available and how to find the lenders willing to set up a loan with this type of arrangement.

Click on a link below to jump straight to a section or keep reading for all the information you need…

Can you still get a no deposit mortgage?

Yes! They are available, however there are some key points to bear in mind. It’s very rare to get a 100% loan-to-value (LTV) mortgage where you borrow the total sum of the property price. But, the good news is there are still ways it can be done.

Speak to a mortgage expert today

Get Started

How to get a mortgage deposit with no cash funds

Most lenders require at least a 5% deposit. But if you’re unable to get together this amount there’s still plenty of options and routes you can take. Here are some avenues that might be worth exploring:

Guarantor mortgages

Using a guarantor means that a willing family member or close friend can actually help you get your mortgage. Sometimes this is also known as a ‘family assist mortgage’. It’s probably the most realistic way of securing a mortgage with no deposit.

Instead of a deposit, they can secure your mortgage against savings or a property they own. Sometimes there are limits to how much of their equity they can use. Lenders might also ask that the savings equal to the cost of a deposit are placed in an account held by them. This acts as a ‘temporary deposit’.

Family offset mortgage

These work in a very similar way to a guarantor mortgage except that if money is put into a savings account, no interest is earned as this is ‘offset’ against the mortgage interest.

Family link mortgage

Using this option would mean that a family member can take out a second mortgage on their home equal to 10% of your property’s value, and you take out a mortgage for the remaining 90% on the property you wish to buy. Then, you repay their 10% equity over 5 years and pay the rest of the 90% over your chosen term.

Gifted deposits

This is when someone gifts you the amount you need for a deposit. These gifts can work in a variety of different ways and can come from a number of sources. Along with family and friends contributing money, there’s also vendor, developer, and landlord gifted deposits to explore.

Using equity

You may own another house or perhaps partially own a family property or holiday home. It can be possible to use the equity you own elsewhere to be used in lieu of a cash deposit.

Assets

Similarly, if you own significant assets (that might be illiquid so they cannot be easily converted into cash), some lenders will allow you to create an asset-backed mortgage arrangement. This is where your assets can be used as collateral and remove the need for a deposit.

Borrowing for your deposit

There are a number of ways you might be able to borrow to cover your deposit. If you have no access to cash savings, there are other ways to access funds.

Taking out a loan to go towards a bigger loan (your mortgage) is not ideal. However, a handful of lenders would be willing to consider this under the right circumstances. There are also some lenders who will let you use a credit card to top-up your deposit amount.

In both cases it’s important to remember that lenders will assess your debt when calculating your affordability. This could prevent acceptance or lead to worse rates. So, it’s vital you speak to the lenders willing to be flexible, otherwise you could face immediate rejections and marks on your credit file.

New build developer loans

Sometimes property developers can give you the option to borrow from them to pay for your deposit on a home they’ve built.

You’d then pay back the agreed amount over a set period of time. But, it’s important to remember you’d be paying this back alongside your mortgage payments.

How a broker can help

Getting a mortgage with no deposit is tough these days, but there are methods you can use to buy a house with little to no upfront money. Using a skilled advisor who has experience securing mortgages for clients without funds for a deposit is going to be extremely important.

In addition to identifying the right lenders who can deal with these situations, they can also help educate you on any government schemes you may be eligible for and walk you through the whole process.

Just make an enquiry and we’ll put you in touch with a mortgage broker we work with who specialises in securing mortgages where no deposit is necessary.

Government schemes available

These programmes are designed to help people with little (or no) deposits get onto the property ladder. Here’s a breakdown explaining some of the main options:

Shared ownership

A shared ownership mortgage is a government scheme that could help allow you to purchase a house with no deposit. If you’re a first-time buyer or in a lower-income household (under £60,000 combined), then you might qualify.

When you buy a property this scheme allows you to take out a smaller mortgage and the government, through a Housing Association, will also own a portion. So, instead of owning 100% of a house, you may only own 25-75%. You then pay a monthly rental payment to the Housing Association for the portion they own. However, this can drastically reduce the deposit needed based on the total value of the house.

What’s even more useful is that there are actually a small group of lenders out there who will offer 100% mortgages on shared ownership properties.

Right to Buy mortgages

If you’ve been living in a council home for over 3 years, you may be eligible to buy the property at a discounted price. The discount can be as much as 70% (depending on how long you’ve lived there) and some lenders are willing to let you use the discount as your deposit.

What to do if you can’t get a 100% mortgage

If you’re unable to entirely remove the need for a deposit, there are still ways that you can drastically reduce how much you need, or get some bonus cash to boost your application:

Help to Buy

Although this will still require a small deposit, it’s worth being aware that you have this option. If you’re a first-time buyer, under the current Help to Buy scheme, you can borrow money to go towards your mortgage deposit. The loan is interest-free for up to 5 years.

The amount you can borrow is up to 20% of the property’s value, or 40% if you’re in London. You then have to contribute a 5% deposit yourself and secure a mortgage for the remaining value of the home.

95% mortgage guarantee scheme

This is another effort aimed towards first-time buyers. You’d still need to get hold of a 5% deposit, but this route increases your chances of getting a 95% LTV mortgage.

High LTV mortgages were paused by many lenders during the coronavirus pandemic, but they’re now up and running again. Under this scheme, the government basically acts as a guarantor for your loan and agrees to compensate lenders if you were to default. This reduces the risk for lenders, making them more likely to accept your application.

Lifetime ISA (LISA)

Again, this doesn’t remove the need for a deposit, but it can help reduce your burden. Currently, you can put up to £4,000 a year into a LISA and the government will top it up by 25%, leaving you with £5,000.

This can only be used for retirement or towards your first home as your exchange deposit. If you used this in combination with some of the other measures described, it will likely help boost your chances of sorting out a suitable deposit.

Examples of zero deposit lenders and rates

Typically speaking, the lower your deposit – the higher interest rates will be from lenders. Each mortgage offer will vary based on your personal circumstances. Here are a few examples of current deals (accurate at the time of writing) from lenders willing to offer a 100% LTV family assist mortgage:

  • Buckinghamshire Building Society – 4.6% APRC (Annual Percentage Rate of Charge) for a 40-year max term. Only available in England and Wales and family members can use up to 60% of the value of their property to secure at least 20% of the property you’re trying to buy. Only available to first-time buyers.
  • Barclays – 3.3% APRC for 35-year max term. The family springboard mortgage is available across the whole of the UK and at least 10% of the property value has to be put into a ‘Helpful Start’ account by the person(s) assisting you.
  • Mansfield Building Society – 5% APRC for a 35-year max term. Only available in England and Wales and a family member can either use their own equity or put money into an account held with Mansfield for at least 7 years. The money or equity used must be equal to at least 20% of the value of the property you’re trying to buy.

It’s important to remember that if you don’t have guarantors available to help, there are still ways to get a mortgage with no deposit. Speaking to an experienced broker is the best way to get your finances evaluated and then receive expert advice on where you can get a mortgage with the lowest possible deposit.

Eligibility criteria and getting the best rates

Depending on which path you end up exploring with your broker, here are some factors that will impact the process and your ability to get the best rates:

  • Deposit loans: if you’re using a loan to pay for your deposit, the small number of lenders who are open to this will likely require a higher amount. So, you could need somewhere in the region of 25%.
  • Government support: for some government assistance schemes, you will need to be a first-time buyer in order to qualify. This will be out of your control to a certain extent. But a skilled broker will be able to direct you towards any help and support that you may qualify for based on your specific situation.
  • Guarantor or mortgage indemnity guarantee (MIG): having either of these in place to help support your mortgage payments can reduce the risk for a lender. It covers their costs if you’re unable to keep up with payments and acts as a form of insurance.
  • Income and employment: whether you’re employed or self-employed will affect a lender’s assessment of you. If you’re self-employed, you’ll need to prove between at least 1-3 years worth of records and accounts.
  • Your credit score: using a lower deposit can mean more risk for lenders. So, they’ll want to take a good look at your credit history. It’s worth downloading all your credit reports and getting your broker to evaluate them before approaching lenders. This way you can take care of any issues in advance and avoid unnecessary mistakes or possible rejections.

Speak with a no deposit mortgage broker

To get a mortgage with minimal or no deposit, your best chance of success is by using a specialist broker. Ideally one who has experience setting up mortgages with low amounts of upfront cash.

We offer a free, broker-matching service. This means we don’t charge anything to quickly assess your needs and then pair you up with a local mortgage expert. They will have the knowledge and contacts to introduce you to the most suitable lenders offering the best rates for your circumstances.

Just call 0808 189 0463 or make an enquiry. We’ll set up a no obligation chat between you and your ideal mortgage broker today. This initial chat won’t cost you a penny, so you’ve got nothing to lose!

FAQs

Can I remortgage at 100% LTV?

Only under very specific circumstances. You will need to provide the lender with some form of security to get a 100% LTV remortgage, ideally another property or asset that you hold enough equity in to bring the loan-to-value ratio down to an acceptable percentage.

Another option would be to use a guarantor, if you have a friend or family member who is willing to help you out by providing security for the debt.

Ask A Quick Question

We can help! We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in mortgage deposits. Ask us a question and we'll get the best expert to help.

FCA Logo
1 of 3
£
£
£
2 of 3
3 of 3 Send!
Pete Mugleston

Pete Mugleston

Mortgage Expert

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!

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 that 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.

Get Started