100% mortgages (zero deposit mortgages)

Who is eligible for a 100% mortgage?

A 100% mortgage is where the bank or building society lends you the full amount that the property costs even though you may have no deposit. That is, if the property costs £200,000, the lender lets you borrow £200,000. For this reason, these mortgages can also be thought of as zero deposit mortgages.

100% mortgages are designed with the first-time buyer in mind. They enable the first-time buyer to get their foot on the property ladder without needing to save for years beforehand.

With property prices - particularly in the South East of England - so high, and increasing numbers of twenty-somethings are graduating with sizeable debts, more and more lenders were willing to offer 100 per cent deals to people who had no deposit. However, with the advent of the 'credit crisis', fewer deals are currently available on the mortgage market.

100% mortgages aren't just for graduates and young professionals. Lenders will consider applications from people in various situations.

It is important to note that if you are a graduate or working in certain professions, there may be a specialist mortgage deal available which is more suitable for your needs. Please consult our graduate mortgage and mortgages for professionals pages for further advice.

How much can I borrow with a zero deposit mortgage?

In the past, some lenders allowed you to borrow over and above the value of the property - even up to 135% - so that the fees and moving costs could be covered too. Unfortunately with the advent of the 'credit crisis' fewer deals are now available.

What you should know about 100% mortgages

An important point to bear in mind with 100% mortgages is that different lenders will have very different lending criteria and will offer very different loan amounts to mortgage borrowers with no deposit. Mortgage rates, terms and conditions also vary widely between lenders.

Zero deposit mortgages can also be more expensive than other mortgage deals on the market.