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In most cases, you need a deposit to get a mortgage, but there are exceptions. Here, you will learn what your options are if you need a mortgage but have no deposit, including 100% LTV deals, government schemes and more.
Can you get a mortgage with no deposit?
Yes. While you would need at least some deposit to get a mortgage under most circumstances, there are ways and means to get approved with none at all.
A small minority of mortgage lenders offer 100% loan-to-value mortgages which allow you to borrow 100% of the property’s purchase price. In addition to this, there are specialist products and government schemes that don’t require a deposit in the traditional sense.
Finally, there are ways you can raise a deposit from scratch very quickly. We will explore them in this guide and help you figure out what is the best solution for you.
Find out what your options are
If are applying for a mortgage with no deposit from the outset, your options are as follows:
- Apply for a 100% mortgage
- Guarantor mortgages
- Borrow or receive a gifted a deposit
- Use a government scheme
Read on to find out more about each of these options.
100% mortgages
Mortgages with a loan-to-value ratio of 100% disappeared during the 2008 financial crisis and did not return until 2023. The first lender to reintroduce them was Skipton Building Society with the launch of its ‘Track Record’ mortgage product for renters who wish to buy.
Skipton’s ‘Track Record’ mortgage is a 100% LTV deal, which means that no deposit whatsoever is required. Instead, you need a history of making rental payments on time for an extended period to prove that you are capable of paying a mortgage on time and in full.
Borrowers must meet the criteria below to qualify for this mortgage:
- Need a history of paying rent on time for 12 consecutive months, within the last 18 months
- Must not have owned a UK property in the last three years
- No missed payments on debts/credit commitments in last 6 months
- Maximum borrowing £600,000 (or 4.49 times annual salary)
- Not available on new build flats
- Unavailable in Northern Ireland
- Up to four applicants can jointly apply
- Maximum term length of 35 years
Skipton’s ‘Track Record’ mortgage can be a viable option for borrowers with zero deposit, but it’s important to bear in mind that there are alternatives. It is highly recommended that you talk to a mortgage broker to go through every available option before you apply.
Guarantor mortgages
The main alternative to 100% LTV mortgages like Skipton’s ‘Track Record’ deal is guarantor mortgage. This is a broad category of products that allows borrowers with limited or no deposit to get onto the property ladder with support from family members.
There are several different types of guarantor mortgages, but most varieties require the guarantor to either allow the lender to place a charge on a property they own and hold enough equity in, or place savings into a special account held by the lender.
The equity or savings serves as security in place of a deposit, but most guarantor mortgages allow the borrower to put down some deposit funds themselves, if they wish to.
The criteria for a guarantor mortgage is as follows:
- Most lenders prefer guarantors to be immediate family (some allow close friends)
- Guarantors must also meet affordability criteria and pass credit checks
- Some lenders only offer guarantor mortgages to first-time buyers
- Guarantors must remain on the mortgage for a set number or years or until an agreed portion of the debt has been paid off
Guarantors must agree to step in and make any repayments the borrower misses, and borrowers must remortgage to remove a guarantor when their commitments have ended.
Borrowing a deposit or being gifted one
If you have no deposit at the start of your mortgage journey, there are ways to secure the funds quickly, such as borrowing a deposit or being gifted one.
A fair number of mortgage lenders will approve gifted deposits, but only a small minority will consider applications where the deposit source is an unsecured loan.
For gifted deposits, the following criteria must be met:
- Some lenders prefer the donor to be immediate family
- Donor must state in writing that the funds are a gift and won’t need to be repaid
- Donor formally agrees that they will have no interest in the property
- Some borrowers will expect giftee to provide at least some deposit themselves
The minority of lenders who allow borrowed deposits set the following criteria:
- Some lenders will only allow your to top up your deposit with a loan
- Loan repayments must be factored into affordability assessment
- Approval unlikely if credit cards or overdraft is the only source
- Some lenders allow formalised family loans (confirmed in writing)
- Some lenders will also consider director’s loans as a deposit source
Government schemes
Most government schemes enable you to get a mortgage with a small deposit (5% of the property’s purchase price) but very few offer no deposit mortgages.
The main exception to this is the Right to Buy scheme and its subsidiary, Right to Acquire. This initiative enables people to purchase their council house or local authority home at a discounted rate, and this discount can be used to cover the entirety of the deposit.
In the past, the UK Government has operated schemes to help people raise a deposit from scratch, such as the Help to Buy ISA scheme, but this closed to new applicants in 2019.
If your preference is to raise a small deposit quickly, rather than pursue a no deposit mortgage, Lifetime ISAs are considered a viable alternative to the Help to Buy ISA.
How to compare no deposit mortgages
You can compare rates and deals on 100% LTV mortgages for free on Teito. When you source a mortgage through us, you also have the option to talk to one of our mortgage brokers about your options, which is highly recommended for no deposit mortgages.
After you have made your initial selection, your advisor will walk you through every option, including guarantor deals (if applicable) and government schemes you can consider.
Choose one of the options below to get started:
Compare no deposit mortgage deals for FREE
Available lenders and interest rates
Interest rates on no deposit mortgages are higher than for mortgages where the borrower is putting down a deposit of their own, but not always significantly higher. For example, Skipton Building Society’s ‘Track Record’ mortgage comes with a rate that is only a fraction of a percentage point higher than some of their comparable 95% LTV (5% deposit) deals.
The same is true of guarantor and family support mortgages. The rates offered are generally slightly higher than comparable first-time buyer mortgages with no family backing involved, but if they are providing enough security to lower the LTV, rates can be competitive.
Lenders who offer no deposit mortgage options include:
- Skipton Building Society: 100% LTV ‘Track Record’ mortgages
- Barclays: Family Springboard Mortgage (guarantor)
- Halifax: Family Boost Mortgage
- Santander: Consider personal loans as deposits on a case-by-case basis
With all 100% LTV, guarantor and other options considered, there are numerous lenders offering no deposit mortgages - speak to a broker to find the best solution for you.
Can you get approved if you have bad credit?
It can be difficult to get approved for a mortgage with bad credit and no deposit, as 100% LTV deals such as Skipton’s ‘Track Record’ product requires clean credit. Having no deposit and adverse credit would place you in two risk categories and limit your options.
However, that isn’t to say approval is impossible. If you have the required family support, guarantor mortgages are available to borrowers with certain forms of bad credit, although serious issues like bankruptcies or very recent credit problems might rule you out.
If you qualify for the Right to Buy scheme, this could also be an option, as criteria can be more lenient for borrowers who are applying through this initiative.
Getting a buy-to-let mortgage with no deposit
Getting a buy-to-let mortgage with no deposit whatsoever is very difficult as criteria can be more stringent in this market and most lenders ask for around 25% deposit.
There are is often no room for negotiation if you are unable to put down any deposit at all, but there are fallback options that could help you raise one quickly, including:
- Remortgaging your home to release equity for the deposit
- Borrowing a deposit (director or company loans)
- Gifted deposits
- Remortgaging a buy-to-let portfolio to release equity
Why choose Teito for your mortgage needs?
You can compare rates and deals on no deposit mortgages for free on Teito and choose the one you want in real time. Our brokers will be on hand to provide advice along the way.
Here are just some of the reasons why our customers choose us:
- You can access rates and deals in seconds
- Our broker specialise in no deposit mortgages
- We are 5-star rated on leading review websites
- It takes minutes to secure an agreement in principle
Ready to compare mortgages online and take advantage of a free, no-obligation chat with a broker who specialises in no deposit mortgages? Get started here.
FAQs
The maximum LTV on Shared Ownership mortgages is usually 95%, so you would normally need to put down 5% of the value of the share of the property you’re buying. There are, however, a small minority of lenders who may consider 100% LTV, but you would be largely limited specialist, intermediary-only mortgage providers who only operate through brokers.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.