Can a first-time buyer buy a home without any deposit?


By UK Mortagage Centre

WITH an increase of lenders offering 0% deposit mortgages, it’s becoming easier for many first-time buyers to get onto the property ladder.

What Is A 0% Deposit Mortgage?

Well, it’s exactly how it sounds, a 0% deposit mortgage means you pay nothing as a deposit on your home and have a 100% loan-to-value (LTV).
This means your loan (your mortgage) covers the entire purchase price of a property.
In the UK, it’s common for many first-time buyers to pay a 5% deposit however the option of 0% deposit can be a lot more obtainable for many first time buyers.
It’s important to bear in mind that no-deposit mortgages have only been recently re-introduced in 2023, with all lenders having stopped offering these mortgages back in 2008 following the financial crisis.

Zero-deposit mortgages have been on the rise in the UK since their return, but why are they becoming so popular?
You don’t need to put down any deposit which can help those who are struggling to save.
For many renters in the UK, this makes zero-deposit mortgages particularly attractive if they struggle to put money away as they spend more on rent each month than they would a mortgage.
However, it’s important to bear in mind that 0% deposit mortgages do come with significantly higher interest rates than even 5% deposit mortgage.

Lenders offer zero-deposit mortgage arrangements with higher interest rates and stricter rules because they’re contributing more money, while the applicant isn’t at risk of losing their own money if they don’t make the repayments.
Generally, this means you’ll be paying out more in the long term for a property than if you had put down a deposit. Not to mention, there are stricter rules for being accepted for this type of mortgage, meaning fewer applicants are likely to be accepted due to stringent affordability rules.
Lenders will often only offer you a zero-deposit mortgage for a loan that’s no more than 4.5x of your salary (for couples, lenders will offer a loan based on your combined salary).
Typically, applicants will need to meet the lender’s ideal applicant credit score and pass crucial affordability check which means, it can be more difficult for buyers, especially first-time buyers, or single applicants to pass these affordability checks and obtain this type of mortgage.

Speak To A Broker!

It’s a broker’s job to get you the best mortgage deal available to you at the time of your application.
We (UK Mortgage Centre) work with mortgages day in and day out, and understand the lenders criteria and can search 1000s of products to find the best deal for you.
We’ll guide you through the entire mortgage process and keep you to date the entire time.
At UK Mortgage Centre we provide straightforward mortgage advice that’s easy to understand and with the aim of saving you money.

01925 573328
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