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Independent explainer: How do no-deposit mortgages work

Journalist: Marc Shoffman, Freelance

ended 21. March 2025

Hi, I am writing a piece for The Independent on how no-deposit 100pc mortgaes work. 

I am keen for mortgage brokers to comment on the pros and cons of these products, what is available and how to decide if they are appropriate for you, are there any risks to consider?

Kind regards

Marc

6 responses from the Newspage community

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Editor
David Stirling
Independent Financial Adviser at Mint Wealth
In Northern Ireland, securing a mortgage can be tough, especially for first-time buyers. The Co-Ownership scheme offers a 100% mortgage solution, allowing buyers to get onto the property ladder without a large deposit, with some local banks offering 100% lending. It also provides the option to gradually buy out the housing association's share. While a viable choice for many, buyers should consider the long-term costs of mortgage and rent payments before committing.
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Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
No-deposit, 100% mortgages can be a lifeline for renters struggling to save, but they come with risks. The main benefit is getting on the property ladder without needing a deposit, which is ideal for those with strong affordability but limited savings. However, the downside is higher interest rates, fewer product choices, and the risk of negative equity if property prices fall. Currently, options like Skipton’s Track Record Mortgage cater to renters with a solid payment history. These loans suit those with stable incomes and long-term plans, but borrowers must be cautious about overcommitting and ensure they can manage repayments.
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Aaron Strutt
Product and Communications Director at Trinity Financial
Many people are so keen to get on the property ladder that they take low or no-deposit mortgages. If you take one of these mortgages, the likelihood is that borrowers will stay in the property for longer than those with more equity in their home; they will also be stuck with their mortgage provider if they cannot make lump sum overpayments. Some no-deposit mortgages need parental guarantees or a track record of renting to qualify. Borrowers will typically need a squeaky-clean credit history.
Accord has £5,000 mortgage while Vida Home Loans has recently launched a 3% deposit rates. Applicants will pay more with higher loan-to-value or no-deposit mortgages.
Before you take a mortgage, it is well worth checking the lender's retention policy to know what will happen after your fixed rate finishes. This is even more important with a 100% mortgage, as you want to avoid getting stuck on expensive standard variable rates as you will find it hard to remortgage.
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Elliott Culley
Director at Switch Mortgage Finance
There are few products that act as no deposit mortgages, for example the family springboard mortgage is an option from Barclays which requires family to provide a deposit which they put into a savings account and gain interest. However for borrowers who don't have this support, they can look at Skipton's 100% mortgage. Affordability for this mortgage is calculated in two ways. The borrowers income but also the interest rate and rent the borrower has been paying as a tenant. I have found the rental payments and current higher interest rates for this product can hamper the amount the borrower can lend which means a smaller property than the borrower is sometimes currently renting. So the product has some limitations currently whilst rates are higher, if rates continue to fall it's likely this product would become more popular as the borrowing capacity should also increase.
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Steve Humphrey
Adviser & Founder at The Mortgage Pod
100% mortgages, or no-deposit mortgages, are an option, but caution should be applied, as this doesn’t guarantee it is the right choice. As of now, options include Shared Ownership and Barclays' Springboard Mortgage. Another option is Skipton Building Society’s track record-based mortgage, which considers prior rent payments. However, it is restrictive and will certainly limit buyers' options. My advice is often to wait until they have a 5% or higher deposit, as this would open up substantially more options and lenders.
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Mark Eaton
COO at April Mortgages
A 100% mortgage can be a game-changer for first-time buyers struggling to save while renting. By removing the need for a deposit, it eliminates one of the biggest barriers to homeownership, allowing buyers to step onto the property ladder much sooner. This is particularly beneficial for renters whose monthly payments are already comparable to mortgage costs but who find it difficult to save a lump sum alongside their living expenses.