100% loan-to-value (LTV) mortgages are offered by a relatively small number of lenders but the number of borrowers arranging one has risen to a five-year high, according to data shared by Comparethemarket. No-deposit mortgages have risen in popularity despite their limited availability and the associated risks of negative equity.
In this article, we look at what's behind the increase in zero-deposit mortgages, whether they are a good idea, and how to make your mortgage choices easier.
What is behind the rise in no-deposit mortgages
ComparetheMarket's data, accessed through a freedom of information request to the Financial Conduct Authority, shows that some 574 zero-deposit mortgages were arranged in the UK during the first three quarters of 2025, an increase of 151 on the same period the previous year. 100% mortgages proved more popular in the North West and South West regions of the country, where 154 borrowers chose the no-deposit route to home ownership. Greater London and South East borrowers arranged the fewest mortgages without a deposit, which may be due in part to higher living costs but could also reflect the greater risk of negative equity from higher house prices in these regions.
The increased popularity is largely down to the impact inflation is having on first-time buyers’ ability to save a deposit. Cost-of-living inflation has outpaced wage growth over the past few years, squeezing household budgets and making it difficult to save enough to get on the housing ladder. The average house price in the UK is currently around £280,000, having stabilised somewhat over the past few years after a large spike during the pandemic.
Some lenders have contributed to the growth of 100% mortgage lending, by launching products that offer no-deposit solutions. Continued government guarantees that secure a proportion of potential losses arising from payment defaults or negative equity, where the property price falls below the mortgage balance as well as loosening stress tests and affordability criteria have also helped. No-deposit mortgages to support homebuyers who can afford the associated monthly mortgage payment but could not afford to save a deposit started to take shape, albeit at much higher interest rates. Skipton Building Society’s Track Record Mortgage, for example, can be secured without a deposit or a guarantor’s support, as long as you have paid equivalent rent for at least 12 months. While this type of mortgage arrangement remains rare, a handful of lenders offer similar mortgage products, including Hanley Economic Building Society, April Mortgages and Family Building Society.
Guarantor-backed mortgages also serve aspiring homeowners with no deposit, but they require access to family or friends who can lock away capital as mortgage security. Barclays and NatWest, among a handful of other lenders, have long offered such deposit-free mortgage loans if you can persuade a guarantor to deposit around 10-20% of the property price into a savings account as security for a period of time.
You can read more information about the various ways to arrange a 100% mortgage in our article, "No-Deposit Mortgages in 2026: Myth or Reality?".
Are 100% mortgages a good idea?
While 100% mortgages can be a unique solution to a common problem for many aspiring homeowners, they do not come without risks. The most prominent of these is the risk of negative equity - any drop in the value of your property could mean that it falls below the amount of debt that you raised against it. Negative equity risks are highest during the early years of your mortgage, as monthly payments mainly cover accruing interest rather than reducing the mortgage balance. The interest rate on 100% mortgage deals is usually significantly higher than you might be able to secure with even a small deposit.
First-time buyers would be wise to weigh the benefits of home ownership using a no-deposit mortgage against waiting to save a small deposit. Even a small deposit of 5% of the property purchase price could yield substantial savings on interest payments. Below we have compared total interest payments over 5 and 25 years based on some of the most competitive interest rates we could find for a £200,000 mortgage loan, arranged over 25 years, at 95% LTV and 100% LTV. This compares the cost of borrowing the same amount at each LTV, rather than comparing the cost of buying the same property with and without a deposit.
100% vs 95% LTV mortgages
| Loan-to-value (LTV) | 5-year fixed interest rate | Mortgage interest cost on a £200,000 mortgage over 5 years | Mortgage interest cost on a £200,000 mortgage over 25 years |
| 95% | 4.58% | £43,197 | £136,229 |
| 100% | 5.79% | £55,100 | £178,915 |
Over the first 5 years, interest payments on a 100% LTV mortgage are £11,903 more than on an equivalent 95% LTV mortgage.
Over 25 years, assuming rates remain the same and the mortgage is not remortgaged, the total extra interest paid on a £200,000 100% LTV mortgage would be £42,686 more than on an equivalent £200,000 95% LTV mortgage.
The last time no-deposit mortgages were this popular was during the pandemic, when first-time buyers facing soaring rents rushed to get on the housing ladder. House prices rocketed, but lenders responded by offering more mortgages at higher loan-to-value ratios. The government’s mortgage guarantee scheme encouraged lenders to do so by securing a proportion of potential losses arising from small-deposit mortgages through defaults or negative equity. The number of borrowers buying without a deposit subsequently plummeted in 2022 when the impact of Liz Truss’ mini-budget hit, and was further squashed as the Bank of England hiked interest rates to control inflation before starting to pick up again in 2023.
Working out if a 100% mortgage is right for you
Choosing a 100% mortgage may not amount to a purely financial decision for some households. Although the costs may be higher, home ownership can provide security against unexpected rent increases and tenancy expiries, as well as the uncertainty they create for families. Although rent prices appear to be stabilising, UK residents still largely see homeownership as the goal for building a secure housing foundation.
The best way to determine whether a 100% mortgage is a good idea and right for your personal and financial circumstances is to seek guidance from a mortgage broker. A mortgage broker can break down the complexities associated with any mortgage and will use your personal information to match you to the right lender. You may wish to search the market for the best mortgage deals to begin the process, which you can do using our mortgage rate comparison tool. It will give you an indication of interest rates and lender fees for a wide array of mortgage deals available across over 90 lenders. 100% mortgage deals do not always appear here so you may need to revert to your mortgage broker for more bespoke mortgage arrangements.
If you do not have a mortgage broker, you can source one through the online directory for financial professionals, Vouchedfor* which lists mortgage brokers alongside their specialist skills as well as customer reviews. If you would prefer to get free online and over-the-phone mortgage guidance, then Habito* can provide this type of mortgage service with all the same advice and expertise as an in-person mortgage broker. Habito's mortgage advisers have access to the best mortgage deals, including those that can only be arranged via an intermediary, and the advisers will use your circumstances to guide you to the most appropriate mortgage solutions to suit your needs.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Habito, Vouchedfor
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