100% Mortgages

  • 100% mortgages are no longer commonly available in the UK, and they required a guarantor
  • Most guarantor mortgages are a maximum of 95%
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.

If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.

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What our Nerds say about 100% mortgages

With a 100% LTV mortgage, a lender is taking on more risk, so lenders require borrowers to have a guarantor who will back them up and make payments if they can’t. Generally speaking, lenders charge higher interest rates for 100% mortgages than for traditional mortgages with a deposit.

While 100% mortgages can take away the pressure of saving up a deposit, there are some risks to consider before applying for one. For example, there is a chance that your property could fall into negative equity if your property value drops to less than the remaining value of your mortgage.

Brean Horne Lead Writer and Spokesperson at NerdWallet

Are 100% mortgages available?

100% mortgages, or anything over 95% have been much harder to obtain since the 2008 global financial crisis. Lending 100% of the property value puts borrowers in a vulnerable situation should the economy or their financial status change. So the product evolved to incorporate a level of safeguarding for both the borrower and lender by requiring security via a guarantor and their income and assets. As it currently stands, 100% mortgages are not available to potential borrowers.

However, Guarantor mortgages do exist for borrowing less than 100% when there is still a deficit to be reached so read on to understand how both types work.

What is a 100% mortgage?

A 100% mortgage covers the full purchase price of a new home, allowing you to buy a property without using a deposit.

For this reason, 100% mortgages are sometimes referred to as guarantor mortgages, 0% deposit mortgages or even 100% LTV (loan-to-value) mortgages.

How 100% mortgages work

100% mortgages work in much the same way as any other type of repayment mortgage so you would still have to make monthly repayments, with interest, for the duration of your mortgage term. Lenders charged higher interest rates for 100% mortgages than traditional mortgages because there was a higher risk they could lose money if you were unable to pay off your mortgage.

Types of 100% mortgages

100% mortgages required borrowers to have a guarantor. This was to give them some security that someone was ready and able to step in if you failed to make your payments. Almost anyone could be a guarantor, including parents, close relatives or friends, though lenders sometimes required the guarantor to be close family.

A guarantor mortgage could be set up in a few different ways. Some lenders required that a guarantor allowed a charge to be secured against their home to provide security against a proportion of the mortgage. Often referred to as using property as security, the charge typically covered between 5% and 20% of the purchase price of the home you were buying.

While a guarantor won’t own a share in your home, they would agree to make the mortgage repayments on it if you can’t. But perhaps even more importantly, if neither you nor your guarantor can pay what you should, and your home is repossessed, a lender could order the repossession of your guarantor’s home if there is a shortfall between the mortgage you still owe and how much your home is sold for.

Family deposit mortgages

Some guarantor mortgages allow a guarantor to put up savings as security rather than their home. These are known as family deposit mortgages.

Lenders may ask guarantors to make a deposit of up to 25% of the value of the home being purchased into a savings account to secure a family deposit mortgage. These savings must then remain in place for a certain number of years, or until a predetermined percentage of the mortgage is paid off.

Your guarantor will get all of their money back along with interest if you pay off your mortgage on time. However, if repayments are missed the lender may hold on to the money longer. Or if you default on your mortgage and the repossession and sale of your home don’t cover the outstanding loan, your lender may use the money in the savings account to pay it off.

Family offset mortgages

A family offset mortgage is when the total amount of your loan is reduced by the value of your guarantor’s savings. It’s similar to a family deposit mortgage except your guarantor won’t earn interest on their savings pot.

There are two types of offset mortgages:

  • Reduced monthly repayment: You can use the savings to reduce the amount of interest you pay each month, making your repayments cheaper.
  • Reduced mortgage term: You can use the savings to reduce the duration of your mortgage, which can also reduce the amount of interest you’re charged.

Can you get a 100% mortgage?

No, deposit mortgages are not currently available. 100% mortgages could only be achieved with a guarantor. That was because lenders had strict lending criteria to ensure that you could keep up with repayments.

How have 100% mortgages changed?

Before the 2008 financial crisis, it was much more common for lenders to offer 100% mortgages or, in some cases, loan more money than the property was worth. However, these loans left a lot of people with mortgages they couldn’t afford. New rules, introduced by the Financial Conduct Authority (FCA), meant that lenders had to take more steps to make sure that borrowers could afford a mortgage before they approved a loan.

Can I get a 100% LTV mortgage?

Lenders were able to make 100% mortgages available to first-time buyers, those moving home and for remortgaging.

However, due to the extra risk a lender takes on if there is no deposit, you would only have been able to get a 100% mortgage if you had a guarantor, who can offer additional security in case you were unable to make repayments, or if you were an existing customer who wants to remortgage.

And even with a guarantor in place, a lender could still turn you down for a 100% LTV mortgage. To reach a decision, a lender would have assessed your eligibility and will then try to work out how much mortgage you can afford.

Most lenders will also take your credit history into account. Having bad credit, or no credit history at all, can make it harder to get approved for a mortgage with no deposit. Taking steps to improve your credit score could boost your chances of being approved for a home loan.

Who offers 100% mortgages?

With most lenders still reluctant to take on the risk that no deposit mortgages pose, there are very few, if any, providers that currently offer 100% mortgages. To find out if any lenders are offering them, you could consult a mortgage broker, who may be able to access deals that are not offered direct to consumers.

Pros & cons of 100% mortgages


  • No deposit needed: provides the chance to buy a home without having to save up a deposit.
  • Family help: could be an alternative to a gifted deposit if a family member wants to help a loved one on to the property ladder.


  • Guarantor: you’ll need to find a guarantor (almost certainly with a decent credit score) to support you, who is willing to put their property at risk.
  • Negative equity: if house prices fall and the value of your home decreases, you could be forced into negative equity where what you owe on your mortgage is more than what your property is worth. This can make it very difficult to remortgage or to move home, and could see you tied into making repayments on a property that is falling in value. Limited deals: the pool of available 100% mortgages is very small.
  • High interest: 100% mortgages are likely to be more expensive than a standard mortgage.

100% Mortgages FAQs

Can you get a mortgage offer without a deposit?

Some lenders offered mortgages with no deposit. These are sometimes known as no deposit mortgages, guarantor mortgages, 100% mortgages or 100% LTV mortgages.

Lenders often asked for a guarantor before you could secure a 100% mortgage. You would also usually have to pay higher rates of interest because there is a greater risk that the lender will lose money if you can’t repay the loan.

How do you get a 100% mortgage?

Once you have a guarantor, you’ll need to decide what type of no deposit mortgage you want to apply for. You could apply for a 100% mortgage over the phone or in person at a local branch.

What does LTV mean?

LTV is short for loan to value and is a term used to indicate the size of the mortgage you want to borrow in relation to the value of the home you wish to buy. So if you don’t have a deposit and want to borrow the entire value of the property, you’ll be looking for a 100% LTV mortgage.

What is a guarantor?

A guarantor is someone willing to support your application for a mortgage or loan, who will step in and make your repayments if you cannot.

Having a guarantor may be essential if you want a 100% LTV mortgage. Typically, they will also be a close relative or sometimes a friend. They will need to be at least 21 years old and have a good credit history to stand the best chance of helping your application. The maximum age tends to vary between lenders.

What to do if you can't get a 100% mortgage?

If you can’t get a 100% mortgage, or decide it isn’t a good choice for you, saving a deposit can widen your mortgage options considerably. A deposit of a few thousand pounds may open the path to getting a 95% LTV mortgage.

If your family isn't able to be a guarantor, but still wants to help you out, it may be worth considering if they can offer a gifted deposit.

Where lenders are rejecting you because of poor credit, there may be some ways that you can improve your credit score.

Are there low-deposit alternatives to 100% LTV mortgages?

Save a deposit of just 5% and the choice of mortgages becomes notably larger; have a 10% deposit ready to go, and 90% LTV mortgages become an option too.

Buyer schemes offered by the government, such as Help to Buy or Shared Ownership, may also be able to help if you only have a limited deposit at your disposal.

How can I save a deposit?

These simple tips could help you save up for a deposit quickly:

  • Boost your savings: Take advantage of the best savings deals and use government-backed schemes such as the Lifetime ISA to give your savings a boost.
  • Reduce your rent: Where possible, reducing expenses such as your rent payments – by moving to a cheaper area or back home, for example – could help you save up your lump sum faster.
  • Cut spending: Create a realistic budget to help you reduce your outgoings and put more money towards your housing deposit.

Is my credit record important for 100% LTV mortgages?

As with any mortgage application, your credit record will always be important as lenders use it to assess whether you’re likely to keep up with the repayments on a loan. The credit history of your guarantor is likely to be just as important to lenders too.

Can I get a first-time buyer mortgage with no deposit?

It may be possible to get a first-time buyer mortgage with no deposit. Some lenders may offer guarantor mortgages which means that they will loan you the total purchase price of a property without you having to put down a deposit, but only with a guarantor.

Can I get a no deposit mortgage with bad credit?

It can be difficult to get a no deposit mortgage with bad credit. Lenders will also consider your income, the size of the mortgage and whether you’ll be able to afford repayments when deciding to approve your application. It’s always worth taking steps to improve your credit score before applying for a mortgage as it could help to boost your chances of being approved.

Can I get a 100% LTV buy-to-let mortgage?

No, a buy-to-let mortgage will always require a deposit. Most lenders will request a minimum deposit of 25% on a property that will not be used as your primary residence.

About the author

Brean Horne
Brean is a personal finance writer at NerdWallet. She covers a range of financial topics and has written for consumer titles including Which?, Moneywise and The Motley Fool. Read more
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