Pros and cons of 100% mortgages

For many first-time buyers, the deposit has become a bigger barrier than the monthly mortgage payment, so a 100% mortgage could help people with strong incomes finally get onto the property ladder.
However, buyers need to remember that removing the deposit doesn't remove the financial risk. Borrowing 100% of a property's value means there's no equity buffer if house prices fall, and negative equity could make it harder to remortgage or move.
I'd encourage buyers to look beyond the headline. A 100% mortgage can be a valuable stepping stone for the right borrower, but only if the repayments remain affordable and they have savings set aside for the unexpected costs that come with homeownership. Buying with no deposit shouldn't mean buying without a safety net!

A 100% mortgage isn't automatically a good or bad idea - it's simply another tool. For the right family it could be the difference between buying a home now or spending years trying to save a deposit while house prices continue to move.

The real risk isn't borrowing 100%; it's stretching yourself beyond what you can comfortably afford. Buyers also need to remember they'll have little or no equity initially, so if house prices fall or they need to sell unexpectedly, their options can become more limited.

Products like this won't suit everyone, but it's encouraging to see lenders continuing to innovate where it genuinely expands consumer choice. The right mortgage isn't the one that lets you borrow the most - it's the one that's still affordable if life doesn't go to plan.

This is a great option for the right first-time buyers. If house prices are 8x the average salary, and most lenders only go up to 5x the borrower's salary, first-time buyers are often out of luck – unless, of course, you can take a 100% mortgage and add Mum or Dad to help close that loan-to-income gap. At Gen H, boosters reduce the loan to income ratio from around 7.5x to 2.5x on average, making mortgages affordable where it was impossible before. Borrowing 100% does pose a risk of negative equity, but being that this is a 5-year fixed term, owners will have more time to build equity in the property through monthly repayments. I personally wouldn't take this product if the fixed term were shorter. The bigger risk is for Mum and Dad, whose credit can be damaged if the owners fail to keep up repayments. As always with more niche mortgages such as this, getting good broker advice is crucial – buyers will need to think hard about if that 6.99% 5-year fixed rate is worth it for them.

If not implemented correctly, Metro could just be gathering the next batch of mortgage prisoners. A 100% mortgage is risky, and if it’s secured against the wrong sort of property people could find themselves trapped. Pre-credit crunch, we saw a lot of 100% lending on high rise flats and some of those borrowers are still stuck or picking up the pieces.

The deposit, not the monthly payment, is what keeps most first-time buyers off the ladder. We see enormous interest in 100% mortgages from our client leads, and it is easy to see why when saving £20,000 takes years while rents keep climbing.
The risk is real though. Homes are sitting on the market longer and sellers are cutting asking prices, so negative equity is no theoretical worry. This can work well for buyers who understand exactly what they are taking on, stress test their own budget, and keep cash aside for the surprises homeownership always delivers. Go in with open eyes or not at all.

For the right buyer this is a genuine shortcut onto the ladder, ideal for renters who can cover a mortgage but will never save a deposit while paying someone else's. The neat trick is that mum or dad go on the mortgage but not the deeds, so the buyer owns their home and the family dodges the second-home stamp duty surcharge.
But the parent is fully on the hook if a payment is missed, so nobody should sign without their own advice. And with no deposit there is no cushion, so if prices dip you could be stuck in negative equity until you have paid the balance down.

A 100% mortgage is not “free entry” to the property market. The deposit has not disappeared; it has been replaced by a higher rate and a parent sharing the risk.

For the right buyer, it can be powerful. It may allow someone with a strong income but no family deposit to stop losing money to rent and buy years earlier. But there is no equity cushion, so even a small fall in the property’s value could leave them in negative equity and make moving or remortgaging difficult.

The biggest warning is for parents. On a joint borrower sole proprietor mortgage, they are not just helping with paperwork; they are legally responsible for the debt. Missed payments could damage their credit file, reduce their future borrowing and interfere with retirement plans.

Buyers should compare the cost of taking this deal now against waiting to build even a 5% deposit. The right question is not “Can I get approved?” It is “Can both generations still cope if life goes wrong?”