Curious about a low or no deposit mortgage?

Saving for a deposit on your first home can be tricky.

Do I qualify for the 100% mortgage deal?

For those who have been aspiring to buy their first property, this mortgage will come as welcome news. All potential applicants will need to be properly assessed by a mortgage consultant to check that they qualify and meet the lender’s affordability tests. To be considered, you must meet the following requirements:

• You haven't owned a property in the UK in the last 3 years
• You have paid all rent for 12 months in a row, within the last 18 months
• You want to borrow up to £600,000

Good news for sellers too

Not only will this new mortgage help first-time-buyers, but it’s also great news for sellers. By removing the deposit barrier entirely, it should help boost the chances of finding a suitable buyer.

What if I have a small deposit?

If you’ve saved up a small deposit, then a higher loan-to-value (LTV) mortgage may be the most suitable for your situation. With loan-to-value referring to the percentage of the property’s value that you are borrowing through a mortgage. There are available mortgages from some lenders at loan-to-value of either 99%, 98%, 95% or 90%, depending on your deposit and loan amount required.

What this means is you put down a deposit that will pay the remaining amount of the cost against the loan. So, if you put down a deposit that is 1% of the property’s value, the lender will offer you a mortgage loan to cover the other 99% of the property.

Are there any other schemes aimed at helping first-time buyers get a mortgage?

There are other types of mortgage deals available that help with those struggling with the affordability of a mortgage. The majority of these rely on a family member or friend offering savings or their own property as a ‘safety deposit’ for the mortgage. Here are the different types available:

• Guarantor mortgage: A home loan where a parent or close family member takes on some of the mortgage risk by acting as a guarantor.
• Family Springboard mortgage: Purchase a home without any deposit. Your family member or friend’s savings are held as security for your mortgage. After 5 years, they'll get their money back, with interest.
• Joint Borrower Sole Proprietor: Allows relatives to contribute to the mortgage without needing to be on the title deeds.
• Non-Resident borrowers: Similarly to Joint Borrower Sole Proprietor scheme - some mortgages allow a co-borrower who won’t live in the home to support the application, but their name will be on the deed.
• Family Assist mortgage: This mortgage product allows a family member to provide savings or property as additional security for the mortgage application.

Each of these options has its own set of criteria and benefits. It’s important to weigh them against your circumstances and long-term financial goals.

Speaking to a mortgage advisor can provide clarity and direction, ensuring you choose the path that aligns with your homeownership aspirations and financial health.

When looking at which option works best for your situation, we recommend seeking your own tax advice to understand the implications of each scheme.

How does Shared Ownership work, and is it an affordable option?

Shared Ownership is a government-backed scheme that allows you to buy a share of a home, which can make getting on the property ladder more affordable and achievable for first-time buyers.

Typically, this is a share of 25% to 75% of the home’s value, however some selected homes are as low as a 10% share. You then pay rent on the remaining share of the property.

With shared ownership, you only need a deposit for the share you're buying - not the full property price. This makes it a much more affordable route onto the property ladder, as the upfront costs are significantly lower.

So, if saving a large deposit feels out of reach right now, shared ownership could be the stepping stone you need to start building equity in a home of your own.

What other help is available from the government when buying a home?

There are several ways the government can support you when you 'relooking to buy a home - particularly if this is your first time buying.

One of the most popular options is the Lifetime ISA, which lets you save up for your first home and receive a government bonus on top of your savings.

There is also the First Homes scheme, which offers certain new-build homes at a discounted price for first-time buyers and key workers.

Additionally, if you’re struggling to save a big deposit, some mortgage lenders offer low-deposit mortgages, which the government has supported in the past.

It’s always worth checking what support is available at the time you’re buying, as these schemes can change.

If you’re not sure and need some guidance, a Countrywide Mortgage Services consultant will be able to assess your circumstances to help you decide which first-time-buyer mortgage is right for you.