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Two new 100% mortgage deals, designed for buyers who are struggling to save for a deposit and can’t rely on financial help from the ‘Bank of Mum and Dad’, have launched this month.
April Mortgages is offering a 10-year or 15-year no-deposit mortgage, and Gable Mortgages has launched two five-year deals. These deals allow borrowers to take out a loan of up to 100% of a property’s value.
Here, we explore the key factors to consider when deciding between 100% mortgages, including how the rates compare and the potential risks. We also explain the other mortgage options designed to help ease the path to homeownership for first-time buyers.
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No-deposit mortgage rates are typically significantly higher than those for deals requiring a deposit, and the new deals are no different.
Gable Mortgages offers a five-year fixed-rate 100% loan-to-value (LTV) mortgage at 5.95% for loans on standard properties or 5.65% for loans on new-build properties, well above the 4.81% available on the leading five-year fixed-rate deal at 95% LTV.
Rates from April Mortgages on its 100% LTV products are even steeper, as they combine long fixed-rate terms with no deposit. Its 10-year fixed-rate deal comes in at 5.99%; the 15-year fixed-rate deal is priced at 6.43%.
By contrast, guarantor mortgages, which allow family or friends to put up money as collateral, tend to offer lower rates. The average rate for a guarantor mortgage at 100% LTV is around 5.56%, with deals ranging from approximately 4.5% to just over 6%.
Both April Mortgages and Gable Mortgages allow maximum loan sizes capped at 4.49 times income, though Gable Mortgages says it will lend 5 times income to key workers, and 4.5 times income to the self-employed.
April Mortgages will only lend on houses (it doesn't accept applications for new-build properties or flats), and you will need an income of at least £24,000.
Gable Mortgages has a standard rate and a new-build home rate, with a minimum loan size of £125,000.
April Mortgages will allow you to make unlimited overpayments. It's something that’s especially appealing given early repayment charges can run into the thousands, particularly for borrowers with high LTV mortgages.
By contrast, Gable Mortgages allows overpayments of up to 10% of the outstanding balance per year, but it charges a 5% fee if you exceed this. That fee then drops by one percentage point each year.
April Mortgages also rewards borrowers for building equity. As you pay your mortgage and lower your LTV ratio, your interest rate will automatically reduce.
Be aware that Gable’s product fees can be high, ranging from £2,095 to £9,995, depending on the property purchase price. In comparison, April Mortgages charges just over £1,000 in fees.
Several lenders have introduced schemes aimed at helping buyers overcome the challenge of saving for a first home deposit.
For example, Skipton Building Society launched its Track Record Mortgages in 2023, designed to support those struggling to save due to high rental costs. The deal offers a five-year fixed-rate with no deposit required and no completion fees, making it more accessible for buyers who are held back by upfront expenses.
However, there are specific eligibility requirements. You must not have owned a property in the past three years and must be buying a home in England, Wales, or Scotland. You’ll also need to show that you’ve paid 12 consecutive months of rent within the last 18 months, provide proof of bill payments, and have no missed debit or credit payments in the past six months.
Yorkshire Building Society offers a similar scheme to support first-time buyers, requiring just a £5,000 deposit. The maximum property value is capped at £500,000, allowing access to a LTV ratio of up to 99%.
Another route to a no-deposit mortgage is through a guarantor mortgage, which allows family or friends put up money as collateral. This can be done by family or friends putting money into a specially designed savings account or using their own home as security.
Barclays, Buckingham Building Society, Halifax, Loughborough Building Society, Tipton & Coseley Building Society and Vernon Building Society all offer a guarantor mortgage.
It's important to consider the benefits and risks associated with a 100% LTV mortgage before applying.
The obvious advantage of going for a 100% LTV mortgage is that you don't need to save a deposit.
It also prevents you from having to turn to the 'Bank of Mum and Dad'. According to Savills, just over half of first-time buyers received family support in 2024, with the average contribution hitting £55,572.
One downside is that monthly repayments are steeper, as rates tend to be higher on these deals. When buying a £300,000 home, you’d pay £2,012 per month on the 100% LTV mortgage from April Mortgages, compared to £1,819 with a 5% deposit on its 95% LTV deal.
You will also need to factor in the other costs of buying a home, like stamp duty and conveyancing fees. So even though you save on the deposit, you will need to have some savings to cover the other costs involved.
There’s also a higher risk of negative equity, where you owe more than what your home is worth, with a 100% mortgage. This can happen if property prices fall faster than you’re able to build equity through repayments. This could make it harder to move or remortgage later on. And like with any mortgage, your home may be repossessed if you don’t keep up repayments.
If you're thinking about taking out a 100% mortgage, you'll likely need to speak to a mortgage broker, because of the risks involved. Indeed, April Mortgages and Gable Mortgages 100% LTV deals are only available via brokers. A broker can help you work out what you can afford and highlight the products that best suit your needs.
