Yes, 100% mortgages are making a comeback—but they’re not right for everyone.
Full-deposit mortgages (aka 100% loans) have resurfaced in the UK market after being off the radar since the 2008 crash. These deals sound great on paper—no deposit needed—but come with higher rates and stricter affordability checks
Why They’re Back
These loans are aimed at renters and first-time buyers struggling to save a deposit. With living costs rising, some borrowers simply can’t build up a 5–10% deposit—so these interest-only options give them a path onto the ladder .
⚠️ What You Should Watch Out For
1. Higher Interest Rates
Without a deposit, lenders charge a premium. Expect significantly higher rates than standard mortgages
2. Tough Affordability Checks
Lenders will scrutinise your income and expenses. They need to be very confident you can keep up with higher monthly repayments .
3. No Equity Cushion
If house prices dip, you’ll be in negative equity—meaning you owe more than the property’s worth. That leaves no safety net
âś… When These Mortgages Might Work
You’re renting in a high-cost area, and saving a deposit isn’t realistic right now
You have strong, stable income that passes the affordability tests
You plan to stay in your home for 5–10 years, riding out any market dips
🏠Even A Small Deposit Helps
Saving just 5% or 10% can unlock much better mortgage rates and lower monthly payments. For example, deals with a 95–90% LTV often come with rates around 5%, significantly cheaper than 100% options
🧠Our Advice
Consider all options—100% mortgages are a last resort, not the norm
Use a broker—they can show you the real cost over time and suggest alternatives
Plan your deposit strategy—even a small cushion can save you thousands
Summary:
100% mortgages are a welcome opportunity for some, but come with added cost and risk. If you’re considering one, get expert advice to understand your true affordability and protect yourself from negative equity.
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