A no deposit mortgage is when you borrow the whole value of the property's value, without putting up a deposit. These are often also known as “100% mortgages”.
Every mortgage has a loan to value (LTV) ratio, which is the percentage of your home's value that has been purchased with a mortgage as opposed to any money you supply.
This could be in the form of a deposit you have saved or equity from your current home – in other words the amount of money you would get after you sold your home and paid back your current mortgage.
100% LTV means the mortgage covers the whole amount. For example, if your house costs £180,000, you would borrow the full £180,000 through a 100% mortgage.
Although rare, it is still possible to get mortgages for 100% of your house's value. In most cases, no deposit mortgages are usually only available if you're an existing customer of the lender or have a guarantor.
The guarantor can either be a friend or family member who is willing to put his own home or savings at risk, in the event that you default on your mortgage.
In most cases, the 100% mortgages you can get as a first time buyer in the UK is a guarantor mortgage. You can only get one of these if a parent or someone else is named on your mortgage to cover any payments you miss.
Most of the deals in this comparison are not guarantor mortgages, but you can find them and other deals designed to help you get on the property ladder by using our first time buyer mortgage comparison.
Yes, but only if you are an existing borrower getting a remortgage on your current property.
For example, if your house has gone down in value, you could owe more on your mortgage than your house is worth. This is called negative equity.
If your home is now valued at £150,000 but you owe £180,000 on your mortgage, you need a 120% LTV deal if you get a remortgage.
The term “0% mortgage” is often mistakenly used to describe no-deposit mortgages (also correctly referred to as 100% mortgages”). A 0% LTV would imply that you're paying for the entire purchase value yourself, so you'd have no need to get a mortgage, but would simply buy the property outright with cash.
Here’s our guide on how to save up for a deposit. Saving a 5% deposit gives you a better chance of being accepted and could help you get a 5% shared ownership mortgage. You will have more choice of mortgage rates if you are able to save up a deposit of 10% or more. The higher the deposit the more security you have. A 0% deposit mortgage puts you at risk of negative equity.
No, you always need a deposit or equity in your current home to get an interest-only mortgage. Interest-only mortgages are considered riskier. A full repayment mortgage means you pay off the equity as well as the interest.
No, you always need a deposit to get a buy-to-let mortgage. Most require at least a 20% deposit.
Yes, your credit record does matter. Lenders want to see proof of your ability to keep up your mortgage repayments. They will review your spending habits and assess your affordability, which may impact how much you can borrow. Here is more on why your credit record matters.
You usually need at least a 15% deposit to get a bad-credit mortgage. Compare deals here if you have bad credit. You may be able to get a mortgage if you have a guarantor.
Check if you can afford one by working out how much you earn and spend. Compare this to how much buying a home will cost you.
money.co.uk is not a mortgage intermediary and makes introductions to Mojo Mortgages to provide mortgage solutions.
money.co.uk and Mojo Mortgages are part of the same group of companies. money.co.uk is a trading name of Dot Zinc Limited, registered in England (4093922) and authorised and regulated by the Financial Conduct Authority (415689). Our registered address is: The Cooperage, 5 Copper Row, London, England, SE1 2LH.
Mojo is a trading style of Life's Great Limited which is registered in England and
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Authority and are on the Financial Services Register (478215). Mojo’s registered office is The Cooperage, 5 Copper Row, London, SE1 2LH, and
head office is WeWork No. 1 Spinningfields, Quay Street, Manchester, M3 3JE.
To contact Mojo by phone, please call 0333 123 0012.