100% Mortgages

Some lenders offered mortgages with no deposit. These are sometimes known as no deposit mortgages, guarantor mortgages, 100% mortgages or 100% LTV mortgages.

Lenders often asked for a guarantor before you could secure a 100% mortgage. You would also usually have to pay higher rates of interest because there is a greater risk that the lender will lose money if you can’t repay the loan.

Once you have a guarantor, you’ll need to decide what type of no deposit mortgage you want to apply for. You could apply for a 100% mortgage over the phone or in person at a local branch.

LTV is short for loan to value and is a term used to indicate the size of the mortgage you want to borrow in relation to the value of the home you wish to buy. So if you don’t have a deposit and want to borrow the entire value of the property, you’ll be looking for a 100% LTV mortgage.

A guarantor is someone willing to support your application for a mortgage or loan, who will step in and make your repayments if you cannot.

Having a guarantor may be essential if you want a 100% LTV mortgage. Typically, they will also be a close relative or sometimes a friend. They will need to be at least 21 years old and have a good credit history to stand the best chance of helping your application. The maximum age tends to vary between lenders.

If you can’t get a 100% mortgage, or decide it isn’t a good choice for you, saving a deposit can widen your mortgage options considerably. A deposit of a few thousand pounds may open the path to getting a 95% LTV mortgage.

If your family isn't able to be a guarantor, but still wants to help you out, it may be worth considering if they can offer a gifted deposit.

Where lenders are rejecting you because of poor credit, there may be some ways that you can improve your credit score.

Save a deposit of just 5% and the choice of mortgages becomes notably larger; have a 10% deposit ready to go, and 90% LTV mortgages become an option too.

Buyer schemes offered by the government, such as Help to Buy or Shared Ownership, may also be able to help if you only have a limited deposit at your disposal.

These simple tips could help you save up for a deposit quickly:

• Boost your savings: Take advantage of the best savings deals and use government-backed schemes such as the Lifetime ISA to give your savings a boost.
• Reduce your rent: Where possible, reducing expenses such as your rent payments – by moving to a cheaper area or back home, for example – could help you save up your lump sum faster.
• Cut spending: Create a realistic budget to help you reduce your outgoings and put more money towards your housing deposit.

As with any mortgage application, your credit record will always be important as lenders use it to assess whether you’re likely to keep up with the repayments on a loan. The credit history of your guarantor is likely to be just as important to lenders too.

It may be possible to get a first-time buyer mortgage with no deposit. Some lenders may offer guarantor mortgages which means that they will loan you the total purchase price of a property without you having to put down a deposit, but only with a guarantor.

It can be difficult to get a no deposit mortgage with bad credit. Lenders will also consider your income, the size of the mortgage and whether you’ll be able to afford repayments when deciding to approve your application. It’s always worth taking steps to improve your credit score before applying for a mortgage as it could help to boost your chances of being approved.

No, a buy-to-let mortgage will always require a deposit. Most lenders will request a minimum deposit of 25% on a property that will not be used as your primary residence.