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For many people, buying a home is the biggest financial commitment they will ever make. However, saving up for a deposit can be a significant barrier for first-time buyers.

This is where 100% deposit-free mortgages come in. These types of mortgages allow buyers to purchase a property without having to save up for a deposit first. There are two main types of 100% mortgages available to buyers:

Guarantor Mortgages

Some guarantor mortgages offer up to 100% LTV (loan to value) borrowing, however, a family member or close friend will be legally required to make up any shortfalls on your mortgage repayments if you run into financial difficulty and fail to make payments.

Family Deposit Mortgages

Similar to guarantor mortgages, a family deposit mortgage requires financial support from a family member. This is achieved by securing funds, using their savings or equity in their own house, as collateral for your mortgage. The financial security provided by a family member must be the equivalent of up to 20% of the property’s value.

Are 100% Deposit-Free Mortgages Right for You?

100% deposit-free mortgages can provide a great opportunity for first-time buyers to get onto the property ladder. However, it is important to carefully consider the pros and cons before making a decision.


  • You won’t need to have saved a deposit to buy your home
  • There’s no need for a large deposit, making it easier to get onto the property ladder and benefit from rising house prices
  • Your mortgage repayments might be cheaper than renting
  • Buyers can use their savings for other expenses, such as home improvements or furniture.
  • It can provide a greater range of options for first-time buyers, who may not have significant savings.
  • With no deposit requirement, it may mean you can afford a higher-priced property.
  • You can build equity in your home and remortgage to a better deal after the introductory term of your mortgage


  • Higher interest rates may be charged, leading to increased overall costs over time.
  • Buyers may be required to have a guarantor, which can be difficult to arrange.
  • Switching to a different mortgage later on might be difficult.
  • The lack of deposit means that you may have negative equity if property prices fall.
  • It can be more difficult to get approved for a deposit-free mortgage due to stricter lending criteria.
  • Your family member’s finances will be tied up for a set period of time

As well as weighing up the advantages and disadvantages of 100% deposit-free mortgages, you will also need to consider that you will need to meet the strict lending criteria required for these types of mortgages.

Alternative 100% Deposit Free Mortgage for Renters

A building society has recently launched a new 100% deposit-free mortgage aimed at helping renters get on the property ladder. Skipton Building Society’s Track Record Mortgage uses your rental payment history along with an affordability calculation to determine how much you can borrow.

To be eligible for this mortgage you will need to:

  • be a first-time buyer, and 21 years old or over
  • have less than a 5% deposit
  • have no missed payments on debts or credit commitments for the last six months
  • meet the building society’s household-to-household criteria
  • have proof of paying at least 12 months’ rent in a row, during the last 18 months
  • have experience paying all household bills for at least 12 months in a row, during the last 18 months

If you meet their criteria, you can use their Track Record Calculator to get an indication of what you can borrow. For a more detailed look at your eligibility and borrowing amount, use Skipton’s Affordability Calculator.

The maximum amount you can borrow with this loan is £600,000. At Arbora Homes, this means you could purchase The Chestnut, a three bedroom detached home, at our latest development, The Lindens at Gosfield, Essex.

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