Guide to 100% mortgages for first-time buyers

Guide to 100% mortgages for first-time buyers

With the UK economy and house prices going up and down like a yo-yo in the past decade, it has made getting a foot on the housing ladder very difficult for a lot of buyers. As a result, we’ve seen an increase in the availability of zero-deposit mortgages.

As the name suggests, this type of mortgage provides the opportunity to buy a first property with no deposit, making the dream of homeownership a reality for many more aspiring homeowners.

To qualify for a 100% mortgage, lenders typically require first-time buyers to have a good credit score and stable income, with no recent history of late rent or credit payments. For most 100% loans, a guarantor is also required.

Taking that exciting step towards owning your own home comes with its fair share of uncertainties, especially when you commit to a 100% mortgage, which is why we’ve written this helpful blog. So, grab a cup of tea, get comfortable, and let’s delve into the world of zero-deposit mortgages.

At Bliss Financial, we know that getting onto the property ladder can feel like a daunting task, but rest assured, you’re not alone on this journey. Our goal is to provide you with impartial and friendly mortgage advice so you can make an informed decision when buying your first property. To arrange a consultation, please get in touch.

What is a 100% mortgage?

A 100% mortgage (also known as a zero-deposit mortgage or no-deposit mortgage) is when mortgage providers lend the entire value of the property without the need for an up-front deposit. So, if your property costs £300,000, you will borrow £300,000.

As a first-time buyer, this could be music to your ears, allowing you to fulfil your dream of owning a home without the need to save for months or even years.

How do 100% mortgages work?

With a 100% mortgage, the borrower will still be responsible for making monthly mortgage payments to repay the loan, including interest charges. It’s important to understand that because the loan amount is higher, the interest rates and monthly repayments are likely to be higher compared to a regular mortgage.

Who is eligible for a 100% mortgage?

To be eligible for a zero-deposit mortgage, you must fit the mortgage provider’s strict lending criteria. This varies, but generally, you’ll need to tick the following boxes:

Good Financial History: Lenders will look for a good credit history and credit score as proof of responsible financial management. If you are applying for a mortgage without a guarantor, the lender will also require evidence that you have been paying rent, household bills for 12 months and credit card bills for the past 6 months, with no missed payments.

Stable Income: Lenders will likely want proof of a stable, consistent source of income to ensure that you can comfortably make the monthly mortgage repayments.

Affordability Criteria: Lenders will assess whether you are able to afford the mortgage repayments based on your income and what you are currently paying in rent. Generally, the mortgage payments will need to be equal to or less than the payments you have been making towards your rent each month.

Associated Costs: While the mortgage covers the full property purchase price, lenders may still require proof of your ability to cover associated costs such as legal fees, valuation fees, and insurance.

For most no-deposit mortgages, the lender will usually require a guarantor. At the time of writing, the only lender to offer a no-deposit mortgage without a guarantor is Skipton Building Society.

What are the benefits of a 100% mortgage?

No deposit: The obvious benefit of a zero deposit mortgage is that you can get onto the property ladder without having to save for a deposit. So there’s no waiting around and scrimping and saving – you can start searching for your new home right away.

No money wasted on rent: Rather than throwing your money away on rent, you instead take on monthly mortgage payments to repay the debt, which will eventually provide you with equity in the property. Once your introductory mortgage deal comes to an end, you may have sufficient equity to seek out a better deal.

No risk for your family: Many people these days purchase a home using a contribution from a family member for a gifted deposit mortgage (see below). This means they take on financial risk if you are unable to pay the mortgage. With a 100% mortgage, there is no risk to your loved ones’ hard-earned cash or home.

What are the potential risks of a 100% mortgage?

Negative equity: If property prices take a dive, you could fall into negative equity, i.e. your property value is less than you owe the mortgage lender. In this scenario, the loan-to-value (LTV) percentage tips over 100%, making it near on impossible to remortgage or access mortgage deals in the future.

High-interest rates: It is also likely that the interest rates will be higher than if you were to have a cash deposit available, meaning more sizeable monthly mortgage repayments.

Fewer lenders: Due to the risk of zero deposit and negative equity, fewer lenders offer a 100% mortgage. However, a professional mortgage broker like Bliss Financial will have a close understanding of the mortgage market and know exactly which lenders to approach on your behalf.

What is a guarantor mortgage?

A guarantor is essentially a safety net for the lender. It is a third party, usually a parent or family member, who agrees to take on the responsibility of the mortgage repayments if the borrower is unable to pay.

By acting as guarantors, they offer their own assets, such as their house or savings, as a guarantee against the loan. This reduces the risk for the lender, allowing them to offer more favourable terms to the borrower.

This is great news for borrowers, as guarantor mortgages give access to a wider range of mortgages, including 100% mortgage deals.

It’s vital that you and your guarantor understand the risks of going into a guarantor mortgage. It is a very wise move to get independent legal advice as well as the guidance of a mortgage adviser before going ahead.

What are family deposit mortgages?

A family deposit mortgage allows first-time buyers to secure a mortgage with the support of their family members. A family member, usually a parent, acts as a guarantor, offering their savings as collateral to assist the borrower in obtaining a mortgage.

The family member’s savings are put in an account for a set period (usually a number of years), and the lender will pay interest on the savings. This account is linked to your mortgage and offsets your monthly payments. At the end of the pre-agreed period, the guarantor gets their money back.

Family offset mortgages work in a similar way to family deposit mortgages, but the guarantor doesn’t earn interest, so the monthly repayments are cheaper.

While family deposit mortgages can be a fantastic opportunity, it’s crucial to tread carefully and consider the potential risks involved. It can put undue strain on family relationships, so it’s key to make sure everyone is on the same page and that expectations are clearly set from the start.

Is a 100% mortgage right for you?

If you have been:

  1. renting for a long period of time (over a year)
  2. find your rental payments and household bills affordable
  3. have a clear credit history of 6 months+
  4. …but don’t quite have the means to save a cash lump sum to use as a deposit
  5. have a willing guarantor (or meet affordability criteria set by certain lenders), and
  6. understand the risks involved…

…then a 100% mortgage could be 100% right for you! If you are at all uncertain, please get the advice of a mortgage broker before you take the leap.

Talk to Bliss Financial for advice on no-deposit mortgages

Bliss Financial is here to offer friendly and caring guidance on the entire range of mortgage products available, including 100% mortgages. We will help you navigate the sometimes complex world of property financing so that you can make an informed decision and enjoy the excitement of buying your first home.

Contact us today for a friendly consultation.


There is certainly a place in the market for 100% mortgages, which is excellent news for many struggling first-time buyers. However, there are few lenders out there willing to lend a property’s value in full due to the risk of negative equity.

A guarantor can be valuable in providing the reassurance lenders need, but you and your family must understand the risks. To determine if a zero deposit mortgage is the right path for you, then seek out the advice of a qualified mortgage broker.

FAQs about 100% mortgages

Check out our frequently asked questions about 100% mortgages, or contact us today for more information:

Can I get a 100% mortgage with bad credit?

To be eligible for a zero deposit mortgage, you must be up to date with your credit commitments and have no missed payments within the last 6 months.

Can I get a 100% mortgage without a guarantor?

At the time of writing, only Skipton Building Society offer a 100% mortgage without a guarantor. Other lenders will insist upon it.

Why does negative equity affect your eligibility for future mortgages?

When you are in negative equity, you owe more money than your property is currently worth. This poses a greater risk to the lender directly, so it considerably narrows your options when you come to remortgage.

If you’re a first-time buyer, check out our guides to help you navigate the mortgage market successfully:

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Amanda Marsden

Amanda is the founder and owner of Bliss Financial. She has been helping clients with their mortgage and insurance needs for over 15 years. Her passion is to fully explore the options open to them and ensures the process is easy with no stress. She also specialises in helping clients invest in buy to let property and landlords.

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Selected from a number online because they stated that they have experience working with people from the military. This was essential given how moving on assignment often can be a negative for many banks when it comes to lending. Amanda was excellent and the process was swift and easy. We had planned to visit face to face but the process was just as high quality over zoom and phone.
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This is my second time remortgaging through Bliss and Amanda. The service provided has made my life stress free and Amanda was thorough with her research into what deal and term would be best for me based on economic uncertainty and where I am atthis point of my life.I'd not use any other mortgage broker ✨
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Amanda was extremely knowledgeable and helpful from minute one. I am very grateful to her for diligently working within a fairly tight timeframe to identify and provide me with the right product.Her communication throughout was prompt and well-received. I look forward to using her services again.
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Amanda was absolutely brilliant from start to finish. She helped us secure our forever home mortgageWould 100% recommend for anyone needing financial services of any kind!
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We have used Amanda for many years. She knows exactly what she is talking about and offers the best advice. I cant recommend Amanda enough if you're thinking of getting a mortgage or going through a Re-Mortgage. She reassured us throughout the whole process and was in touch every step of the way. Thank you Amanda, here's to many more years.
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We used Amanda a few years ago for our first mortgage. She was an absolute hero for us. She sat us down and explained everything thoroughly putting all out worries at ease as first time buyers. We had issues with our chain which meant our mortgage offer lapsed and Amanda was there every step of the way right through to the day we moved in. Due to remortgage in the next year or so and I will always go back to Amanda.
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Once again very helpful and prompt in helping us with remortgaging our property, highly recommended
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Amanda was absolutely brilliant from start to finish. She helped me secure my first mortgage and also helped with organising the best deals on life and home insurance for my house. Would 100% recommend for anyone needing financial services of any kind!
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We specifically selected Bliss as financial advisors for our mortgage, as we'd read great reviews from other first time buyers. Amanda was so welcoming and helpful, introducing us to the whole process. We actually went to her thinking we were fish out of water, and wanting to but not expecting to but for a few years, just wanting to get our heads around it. However everything felt easy, quick and well explained and we were accepted for a within approx 2 months of starting our search. Amanda has been amazing throughout the entire process - even personalising the way she presented documents to us to suit our styles (me, needing to talk everything out and my partner more graphs and charts!). Evening appointments were organised to work around our work schedules. She was in constant communication with all stakeholders, chasing things up for us and since moving, also supporting with insurances. I'd highly recommend Bliss, and specifically Amanda for any financial advisory services however particularly first time buyers, as no question feels like a silly question. For future purchases, selling, and any other financial services - we will definitely return to Bliss.
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Great service. Professional, friendly and efficient. Amanda did a great job in advising me and then finding and securing the best mortgage to suit my situation
Ed T.
Absolutely amazing service, couldn't have received any better. Very friendly and quick at replying to all enquiries. Very understanding of our circumstances which were difficult but still got us everything we needed for our new house. Thank you again Amanda, will be recommended you to everyone who needs a mortgage broker ☺️
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Amanda helped us to secure our first mortgage. She was on hand for support all the way through the process and very helpful in explaining things in a more simple way to help us to understand. She kept in contact with us regularly throughout the process and really made us feel at ease. We cannot thank Amanda enough for her support and help.
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I came across Bliss financial solutions by google search when desperately trying to find a mortgage advisor who could do the impossible (secure a DiP quickly, that met my difficult short term self employment circumstances).Amanda from Bliss has been a pleasure to work with. The perfect balance of professional and friendly, incredibly organised and certainly not deterred by a challenge. I’m really grateful for the time and effort she put into my case to allow me to secure the house I wanted within the mandated timeframe. Thank you so much Amanda and Bliss for allowing us to get our new home 💜
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Switching mortgages has always been a frustrating and time consuming experience but using Bliss made the process seamless and most importantly stress free! They were excellent and I would highly recommend their services.
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We have been in our new house for nearly 2 months now all thanks to Bliss Financial Solutions, Amy was amazing sorting our new mortgage out and talking us through everything we needed to know. Very smooth process with good communications. Thank you very much. 🙂
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We have recently used Amy at Bliss to help us get a mortgage. After having a stressful time at high street banks and other mortgage brokers, we contacted Amy for help. Amy was absolutely excellent and the work she does is outstanding. Amy went above and beyond and managed to find us a mortgage in a matter of days. Throughout the whole process Amy kept us up to date and managed the mortgage application seamlessly despite a stressful time with other companies. I would like to express my many thanks to Amy and the team at Bliss for being so excellent and thanks to them we now have the keys to our new home.
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Bliss Financials was a vital part of my journey to home ownership in the UK. They always gave personalized yet professional advice and were always accessible and responsive all through the process. They were very thorough, transparent and client centered; offered and discussed all the available options to enable me make an informed choice. I would totally and wholeheartedly recommend their services and I am very grateful to Amy who handled most of the process as well as Amanda and Sophie. Great team/firm!
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I would like to praise the excellent service of the Bliss Financial Solutions LTD.I have a brilliant experience with this company. I was buying a house for the first time and Bliss Financial advised me on every step of the process (mortgage, insurance), offering me suitable options that I could choose from. I always got great offers and still was in control.All members of the team (Amy, Sophie, Amanda) are brilliant, very professional, friendly and responsive.I am very grateful to Amy (my consultant) as she did help me very much throughout the process, nothing was a problem,I received responses straight away and she also prompted other parties to act swiftly (lender, insurance companies, solicitor, etc.).If I need mortgage or insurance in future, I will definitely ask Bliss Financial for help again.
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Amanda worked extremely hard and was really efficient is securing a fixed deal for me at a time when rates were being removed across the board. I would recommend them to anyone.
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Excellent from start to finish. Every decision and option were made clear to us about the implications and any questions we had were answered in a timely manner, making remortgaging easier than I imagined it would be. Thank you to Bliss Financial Solutions for excellent service and attention to personal details that really made us feel like our priorities were put first. We will use again at our next remortgage and would recommend to anyone.
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Excellent company, fast and responsive and a professional outfitI appreciate Amy’s swift advice on a deal to secure a good rate 12hrs before the rate changed
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What a fantastic service. I contacted Amanda via a friend recommendation. She was friendly and helpful. She passed me to Amy who was my advisor for the whole process.As a first time buyer, I was like a rabbit in the headlights. But Amy reassured me and made the whole thing a breeze, with regular contact and updates along the way.Thank you to you all.Highly recommend 😁See you when it's time to remortgage 😉
Steven R.
We have used Bliss/Amanda for a number of mortgages now and the service has always been second to none!We have had complicated financial situations that the Bliss team have used their extensive knowledge to support and ensure we receive the best product for us.We always recommend Bliss to all our friends and family!Thank you to Amanda, Amy and Sophie
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The staff are amazing and very helpful throughout the whole process, the rates are very competitive and the after sales service is second to none, I would highly recommend Bliss Financial to anyone.MarkAspire Property Rentals
Mark L.
Any Lyons found us an excellent mortgage deal and then helped us through a long complex legal process regarding the house. She was there for us all the way through keeping us informed and chasing up when there were delays, Thank you Amy and her team.
Ken W.
Amy has been amazing from the start of our process as first time buyers until completion. We had a few delays along the way due to waiting on a new build but Any was there to guide us through every step of the way to help us rearrange another mortgage and kept us regularly updated on the process. I have already recommended her to friends and family and wouldn’t hesitate to use her again when we remortgage.
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Really happy with the service from Amy and Bliss Financial Solutions - Amy made sure everything was as straight forward as possible, was super communicative and really easy to deal with. Would not hesitate to recommend them.
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