This article has been written by Kaz, an independent mortgage broker we work closely with to support our landlords. He partners with Homefinders to provide our clients with expert, trustworthy, and up‑to‑date mortgage advice. If you’d like to review your buy‑to‑let mortgage options or book a call with Kaz directly, you can do so via our Homefinders Mortgages page.
Why No-Deposit Mortgages Are Making Headlines
For many first-time buyers, saving a 10–20% deposit is unrealistic, especially in high-cost areas. Recently new to the market, no-deposit mortgages lower that barrier and make homeownership more accessible.
What is Skipton’s Track Record Mortgage?
If you’re a first-time buyer with 12 months of consecutive rental payments in the last 18 months, there are lending options to borrow up to £600,000 (subject to income and criteria) without the requirement of an initial deposit.
Why This Can Be Good News
In cities like London, rent can far exceed monthly mortgage payments. With a mortgage, each payment builds equity, moving you up the property ladder rather than simply paying a landlord.
Risks Buyers Should Know
- Negative equity: Borrowing 100% LTV means house-price drops could leave you owing more than the property is worth.
- Affordability stress: Payments include interest, maintenance and insurance. Interest-rate rises can be challenging. Homeownership is a commitment and entering with no equity increases financial pressure.
- Higher interest: No-deposit mortgages come with a higher amount of interest than other mortgage options.
My Advice
No-deposit mortgages are a step forward for access and inclusion, but only for buyers who are informed, realistic, and financially disciplined. Overpayments and careful budgeting can help to build equity and reduce risk. An in-depth chat with a broker/adviser, like myself, will determine if a 0% deposit mortgage is a suitable option for you. Other low-deposit options that require 2%, £5,000 or 5% deposits might be more suitable.
Conclusion
No-deposit mortgages are a useful tool and not a magic wand. For renters with stable income and careful budgeting, they offer a stepping stone to homeownership and can mean getting on the housing ladder a lot more quickly than waiting to save a large deposit.
If you’d like to discuss your options, schedule a free, no-obligation initial consultation with me.
Disclosure
I am a mortgage adviser authorised and regulated by the Financial Conduct Authority. The content above is for information purposes only and does not constitute personal advice. Mortgage products are subject to eligibility, terms, and conditions, and you should seek independent advice tailored to your circumstances before making decisions. Your home may be repossessed if you do not keep up repayments on your mortgage.
Kaz Sood, Momentum Mortgages