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What Is a 100% Mortgage and How Do They Work? (UK Guide)

Many first-time buyers assume they must save a deposit before they can buy a home.

Traditionally this has been true, with most lenders requiring at least 5% of the property price as a deposit.

However, some lenders have introduced products that allow buyers to borrow 100% of the property value, meaning no cash deposit is required.

These mortgages are often referred to as 100% mortgages.

This guide explains how 100% mortgages work, who they are designed for, and what buyers should understand before considering one.

⚠️ This article is for general information only and does not constitute mortgage advice. Mortgage eligibility depends on individual circumstances and lender criteria can change.

What is a 100% mortgage?

A 100% mortgage is a mortgage where the lender provides the full value of the property purchase.

For example:

  • Property price: £200,000
  • Deposit required: £0
  • Mortgage amount: £200,000‍

Instead of using savings for a deposit, the lender finances the entire purchase price.

Because the lender is taking on more risk, these mortgages often come with additional requirements or conditions.

Why most lenders require a deposit

Most mortgage lenders require a deposit because it reduces risk.

A deposit:

  • ‍Reduces how much the lender is lending
  • Provides a financial buffer if property values fall
  • Shows the buyer has been able to save

With a 100% mortgage, the lender does not have that security, which is why these products are less common and often come with stricter criteria.

Who offers 100% mortgages?

Some lenders have introduced products designed to help buyers who have stable incomes but have struggled to save a deposit.

Examples include:

  • April Mortgages – offers products allowing some buyers to borrow up to 100% of the property value, subject to affordability checks and lender criteria.
    More information can be found here: https://aprilmortgages.co.uk/existingcustomers/
  • Melton Building Society – offers a 100% mortgage product with specific eligibility criteria.
    More information can be found here: https://www.themelton.co.uk/
  • Skipton Building Society – offers the Track Record mortgage for renters, which allows some buyers to purchase without a traditional deposit if they can demonstrate a strong rental payment history. More information can be found here: https://www.skipton.co.uk/
  • Barclays Family Springboard Mortgage – allows a family member or friend to place 10% of the purchase price into a savings account with Barclays for five years. After this period, the savings are returned with interest if the mortgage has been maintained. More information can be found here: https://www.barclays.co.uk/

As with all mortgage products, availability, criteria and features can change over time.

How do lenders assess a 100% mortgage application?

Because there is no deposit, lenders will usually assess applications carefully.

They may focus more heavily on:

  • Income stability
  • Employment history
  • Credit history
  • Affordability calculations
  • The type and value of the property

In some cases, lenders may also set limits on:

  • Maximum loan amount
  • Maximum property value
  • Minimum income requirements

Are 100% mortgages more expensive?

Often, yes.‍

Because the lender is taking on more risk, interest rates may be higher compared with mortgages where a deposit is provided.

  • Buyers may also have fewer lender options available.
  • However, for some buyers the benefit of getting onto the property ladder sooner may outweigh the higher rate.
  • What are the risks of a 100% mortgage?
  • One of the main risks of a 100% mortgage is negative equity.
  • Negative equity occurs when the property value falls below the amount you owe on the mortgage.

For example:

  • You buy a property for £200,000 with a 100% mortgage
  • The property value falls to £185,000‍
  • You still owe £200,000

This can make it more difficult to move or remortgage in the future.

This is why lenders assess affordability carefully for these types of mortgages.

Are there alternatives to a 100% mortgage?

Yes — there are several other options that may help buyers with smaller deposits.

These can include:

  • £5,000 deposit mortgages‍
  • Gifted deposits from family‍
  • Family support schemes‍
  • Renters’ mortgage products

Exploring all available options can help ensure you choose the most suitable route for your situation.

Final thoughts

  • 100% mortgages are designed to help buyers who have strong incomes but have struggled to save a deposit.
  • While they can provide an opportunity to buy sooner, they are not suitable for everyone and come with additional considerations.
  • Understanding how these mortgages work — and the potential risks — can help buyers make informed decisions when planning their first home purchase.
  • This article provides general information only. Mortgage eligibility and suitability depend on individual circumstances and lender criteria can change. A mortgage adviser can help explain which mortgage options may be available based on your circumstances.

Based in Brecon, Powys, I support first-time buyers locally and across the UK with clear, jargon-free mortgage advice tailored to their individual circumstances.

  • Employment history
  • Credit history
  • Affordability calculations
  • The type and value of the property

In some cases, lenders may also set limits on:

  • Maximum loan amount
  • Maximum property value
  • Minimum income requirements

Are 100% mortgages more expensive?

Often, yes.

Because the lender is taking on more risk, interest rates may be higher compared with mortgages where a deposit is provided.

Buyers may also have fewer lender options available.

However, for some buyers the benefit of getting onto the property ladder sooner may outweigh the higher rate.

What are the risks of a 100% mortgage?

One of the main risks of a 100% mortgage is negative equity.

Negative equity occurs when the property value falls below the amount you owe on the mortgage.

For example:

  • You buy a property for £200,000 with a 100% mortgage
  • The property value falls to £185,000
  • You still owe £200,000

This can make it more difficult to move or remortgage in the future.

This is why lenders assess affordability carefully for these types of mortgages.

Are there alternatives to a 100% mortgage?

Yes — there are several other options that may help buyers with smaller deposits.

These can include:

  • £5,000 deposit mortgages
  • Gifted deposits from family
  • Family support schemes
  • Renters’ mortgage products

Exploring all available options can help ensure you choose the most suitable route for your situation.

Final thoughts

100% mortgages are designed to help buyers who have strong incomes but have struggled to save a deposit.

While they can provide an opportunity to buy sooner, they are not suitable for everyone and come with additional considerations.

Understanding how these mortgages work — and the potential risks — can help buyers make informed decisions when planning their first home purchase.

This article provides general information only. Mortgage eligibility and suitability depend on individual circumstances and lender criteria can change. A mortgage adviser can help explain which mortgage options may be available based on your circumstances.

Based in Brecon, Powys, I support first-time buyers locally and across the UK with clear, jargon-free mortgage advice tailored to their individual circumstances.

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