100% mortgage for first time buyers
The No Deposit Mortgage for first time buyers was launched in May 2023. This is a no deposit 100% mortgage designed exclusively for those who have been renting and wish to take the first step on the property ladder.
If you are a first-time buyer and have been renting for at least 12 months you can take advantage of this zero deposit mortgage product with your maximum lending based on the average rent you have been paying.
For example, if your average rent over the last six months is £1000 per month, you could borrow up to £176,627 to purchase your first home without deposit.
What is the Mortgage Rate for a No Deposit Mortgage
This 100% mortgage product launched by Skipton Building Society is offered to first time buyers with a 5-year fixed rate of 5.94%.
100% Mortgage Maximum Borrowing and Minimum Payments
The table below shows the maximum amount a first time buyer can borrow using the no deposit mortgage product. These figures are based on the average rent paid per month of the preceding 12 months to mortgage application.
| Current Average Rent | Maximum 100% Mortgage | Mortgage Costs |
| £500 | £88,313 | £500 |
| £750 | £132,470 | £750 |
| £1,000 | £176,627 | £1,000 |
| £1,250 | £220,783 | £1,250 |
| £1,500 | £264,940 | £1,500 |
| £1,750 | £309,067 | £1,750 |
| £2,000 | £353,253 | £2,000 |
| £2,250 | £397,410 | £2,250 |
| £2,500 | £441,567 | £2,500 |
The figures above are based on maximum borrowing and lowest monthly payment (35 year term). A shorter mortgage term will mean a higher monthly payment (for example a 25 year mortgage term will add 20% to the above monthly payment figures)
Requirements for a No Deposit Mortgage
- every applicant must be a first-time buyer and aged 21 or over
- deposit can be zero but cannot be more than 5% of the purchase price
- each applicant must have a clean credit record with no missed payments in the last six months
- every applicant must be listed on the current rental agreement
- applicants must prove they have paid rent for at least 12 months in a row in the last 18 months, also that they have been paying all household bills in that period
- the lender will accept up to 4 applicants per application
Proving your rental history when applying for 100% Mortgage
To prove your rental history for a no deposit mortgage you will be asked to provide either 12 months’ bank statements showing your rent payments or a letter from a registered letting agent.
The maximum amount you can borrow using the No Deposit Mortgage
The maximum mortgage size for first time buyers under the zero deposit mortgage scheme is £600,000
What type of properties can you buy with a No Deposit Mortgage?
Newly-built flats are excluded from the no deposit scheme, although newly-built houses can be accepted.
Properties under other affordable housing schemes such as shared ownership are not suitable for this mortgage product
Other costs to consider alongside a No Deposit Mortgage
Funds for other costs such as legal fees and stamp duty land tax cannot be borrowed and must be available from your own (or gifted funds).
If you are a First Time Buyer you receive a concession on your Stamp Duty Land Tax costs with your first purchase.
You do not pay any stamp duty land tax on the first £425,000 of your purchase price. You pay 5% on any value above £425,000.
Example:
If you were to purchase a property valued at the maximum allowed under the no deposit mortgage (£600,000), you would pay 5% tax on £175,000 (£600,000 – £425,000). Your stamp duty land tax bill would therefore be £8,750 on a £600,000 purchase.