Want to purchase your own home but can’t save a deposit? We’ve got some great news for you: 100% mortgages are returning in 2025.

These mortgages haven’t been widely available since the 2008 financial crisis. Their comeback means that qualifying applicants can now own a home without paying a deposit, which is especially encouraging for first-time buyers who want to climb the property ladder.

To give you the inside track on new 100% mortgages, we explain how these loans work and who might qualify. We also highlight the pros, cons, suitability, and risks you need to know before applying.

What is a 100% Mortgage?

A 100% mortgage allows buyers to purchase a home without a deposit. Unlike 95% or 90% loan-to-value (LTV) mortgages, which require a 5% or 10% stake, 100% loans cover the entire purchase price.

The only costs you generally pay from your pocket are surveyor and legal fees, Stamp Duty, and moving expenses.

Why are 100% Mortgages Back in 2025?

In 2025, we’ve seen the most significant return of zero-deposit mortgages since the global financial crisis of 2008.

This comeback reflects a broad recognition from government, regulators, and lenders that we need to get the housing market moving. High rents, rising house prices, and slow savings have made it tough to acquire a home, especially for first-time buyers.

Encouraged by the government to ease mortgage rules, the FCA is simplifying loan access for consumers. A few lenders have announced 100% mortgages in recent months, a development that should help many buyers get onto the property ladder sooner.

How Do No-Deposit Mortgages Work?

A no-deposit mortgage works the same as a traditional mortgage in that your monthly repayments are calculated based on the loan amount, term, and interest rate. The defining difference is that no upfront deposit is needed.

Other key features include the following:

• The interest is generally higher compared to low-deposit mortgage deals.
• You must have a solid credit score, a stable career (steady incomes), and a strong financial history to qualify.
• No-deposit mortgages have different types of rate structures. Some are fixed-rate, locking in your interest rate for 10 to 15 years. Others are based on the lender’s standard variable rate.
• A specific type of 100% loan, sometimes called a “track record” mortgage, is aimed at renters with an excellent record of paying rent on time.

You may have heard of guarantor mortgages. These also cover the full purchase price but aren’t technically 100% mortgages because they require collateral from a third party, often a family member.

Who Can Apply for a 100% Mortgage?

If you’re wondering, “How can I get a 100% mortgage?” you should know that these loans come with strict eligibility criteria and are not available to everyone, especially not those with bad credit.

Lenders want to see:

• Excellent borrower credit score and financial history (a poor credit score will disqualify you).
• Stable employment and income.
• Affordability checks to ensure you can manage the monthly payments.
• A minimum household income.

Some lenders may apply other restrictions, such as postcode-based exclusions, so always check the specific terms.

Pros and Cons of 100% Mortgages

Before committing to a 100% mortgage, weigh the advantages against the potential drawbacks.

Pros

• No deposit is needed, making it ideal if you haven’t accumulated savings.
• Helps you acquire property sooner, so there’s no need to wait years to build a deposit.
• In some cases, mortgage repayments may be lower than rent.

Cons

• Higher monthly repayments because the loan covers the full property price.
• Greater risk of negative equity, meaning if property prices fall, you may owe more than your home is worth.
• Stricter qualifying criteria, making these loans only available to borrowers with a good credit history.
• Fixed rate for 10-15 years, meaning you may need to fix your interest rate for 15 years. If rates drop, you don’t benefit from lower repayments.
• Limited choices as only a few lenders currently offer these mortgage deals.

How Do 100% Mortgages Compare to Low-Deposit Deals?

When deciding between 100% mortgages and low-deposit options like 95% or 90% LTV loans, consider these factors:

• Cost: 100% loans typically carry higher interest rates, making them more expensive over time.
• Availability: 90% and 95% mortgages are more widely available. This gives you more lender and deal options.
• Benefits of a small deposit: If possible, contributing personal funds (even 5%) is a smart move. When you stake your own savings, you usually receive a better interest rate and create a buffer against falling house prices.

Are No-Deposit Mortgages a Good Idea?

The answer depends on your personal circumstances and financial situation. These loans can be a smart choice if:

• You have a stable income, job security, and excellent credit history.
• You have long-term plans to stay in the property (5+ years). This mitigates short-term property market fluctuations and reduces early repayment charges.
• Your rent payments are very high, and the mortgage payment is comparable or lower.
• This mortgage is not recommended if:
• Your employment position is less stable.
• You’re buying in a market or area where the value of the property fluctuates widely.
• The repayments squeeze your budget, leaving you with little disposable income. Without a financial cushion, you are vulnerable to unexpected expenses, e.g., car repairs.

Speak to a Reputable Mortgage Advisor

As the largest mortgage broker in Essex, we compare mortgages across the market to provide first-time buyers and existing homeowners with great deals. Speak to one of our friendly mortgage advisors to find out whether a 100% mortgage is the right option for you and to get an overview of lenders. Contact Flagstone for a free consultation today.