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A Complete Guide to Low and No Deposit Mortgage Options in the UK
No deposit mortgage sounds appealing, especially for first-time buyers facing rising rents and slow savings growth. While most UK mortgages require at least a 5 percent deposit, several lenders offer no-deposit options under specific conditions. Understanding how these arrangements work can help buyers determine whether a 0 percent deposit pathway is realistic and what alternatives exist for those who need additional support.
What does “no deposit mortgage” actually mean?
In the UK, a no deposit mortgage refers to a product that offers 100 percent loan-to-value (LTV). In other words, the lender finances the full cost of the property. These products are not widespread and come with strict eligibility rules because they involve higher risk for lenders.
MoneyHelper, the UK government-backed financial guidance service, notes that while low-deposit mortgages are now more common due to the Mortgage Guarantee Scheme, true no-deposit options remain limited. They typically require additional security, such as a guarantor or evidence of strong rental payment behaviour.
Halifax also confirms that no deposit mortgages usually involve support from a family member or specific track-record models rather than open-market lending to all borrowers.
How do no deposit mortgages work?
There are two main structures used in the UK:
1. Track-record mortgages (100% LTV)
Some lenders offer 100 percent LTV products for applicants who can demonstrate a proven history of paying rent consistently and on time. The idea is that if you can afford monthly rent equal to or greater than the expected mortgage payment, you may be able to afford homeownership.
Skipton Building Society introduced one of the most referenced models, requiring a clear 12-month rental track record and no missed payments. This acts as an affordability benchmark in place of a deposit.
2. Guarantor-supported options
A family member can provide additional security, often by placing savings in a linked account or using part of their own property’s equity. The guarantor does not become a co-owner but may be liable if payments are missed.
Halifax highlights that these products are not typical for the mainstream, and borrower protections and suitability checks remain essential.
How no-deposit mortgages differ from low-deposit alternatives
Most first-time buyers interact with low-deposit rather than no deposit mortgages. These include:
5% deposit mortgages through the Mortgage Guarantee Scheme
Standard 90–95% LTV products offered by many high street lenders
Builder or developer incentives for new-build homes
The key differences are:
Risk level: 100 percent LTV carries more risk for both borrower and lender.
Eligibility: No-deposit mortgages require guarantees or proven rental history while low-deposit products follow standard rules.
Availability: Many more lenders offer low-deposit mortgages compared with no-deposit.
Who might qualify for a no deposit mortgage?
Eligibility typically requires:
A strong and consistent rental payment history
Clean credit file with no recent missed payments
Stable income and clear affordability
Either a guarantor or a lender that supports track-record models
No significant unsecured debt
These criteria may vary and meeting them does not guarantee approval.
Advantages and risks
Advantages
Enter the property market faster
No need to save a large deposit
Can benefit renters who already meet monthly affordability
Risks and considerations
Higher monthly payments due to higher LTV
Increased vulnerability to negative equity if property values fall
Limited lender availability and stricter assessments
Borrowers should take time to review their long-term financial stability before choosing a no-deposit option.
How PBSbrokers can help
At PBSbrokers we help applicants understand whether a no-deposit or low-deposit pathway aligns with their financial position. We assess affordability, review credit history and identify lenders whose criteria match the applicant’s situation. Our goal is to provide personalised and transparent guidance so buyers can make a confident and informed decision.
Disclaimer
Eligibility, affordability criteria and product availability may change over time. For personalised guidance, please contact PBSBrokers before making any financial decisions.
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