Sales of 100 per cent mortgages hit a five-year high in 2025 as hard-up buyers struggled to save for a deposit.
In the first three quarters of last year, 574 zero-deposit mortgages were handed out, against 402 for the same period the previous year.
That is according to Financial Conduct Authority data extracted via a Freedom of Information request by Compare the Market.
No-deposit mortgages typically come with a higher interest rate. According to Compare the Market and L&C, a buyer taking out a 95 per cent mortgage versus a 100 per cent mortgage could save nearly £30,000 in interest in the long-run.
They are also at higher risk of negative equity, when the value of a home falls below that of the mortgage secured on it, making it harder to remortgage or sell.
Locations which saw the highest number of 100 per cent mortgages being utilised last year included the North West of England, the South West of England, the East Midlands and Yorkshire and the Humber.
In the first three quarters of 2025, some 76 buyers used a no-deposit mortgage to buy a home in both the North West and South West of England.
Sales of 100% mortgages hit a five-year high in 2025, data seen by This is Money shows
In the East Midlands and Yorkshire and the Humber, 67 buyers in each region snapped up a home using a 100 per cent mortgage in the period.
In Scotland, 64 buyers used a no-deposit mortgage to buy a property, while in Wales the number was just 26.
Despite facing higher than average property prices, buyers in central and Greater London were more cautious about using 100 per cent mortgages, with only 26 buyers doing so in the period.
In Northern Ireland, where options for 100 per cent mortgages are more limited than in the rest of Britain, zero buyers plumped for a no-deposit mortgage in the first three quarters of last year.
According to Compare the Market, 452 buyers used 100 per cent mortgages in 2021, but this number fell to 135 in 2022, the year of Kwasi Kwarteng’s mini-Budget.
Unfunded tax cuts in that fiscal event led to an interest rate spike which saw some lower-deposit mortgages pulled from the market.
Since then, no-deposit mortgages have been rising in popularity, with 248 used in 2023, 423 in 2024 and 574 in the first nine months of 2025.
Charlie Evans, a money expert at Compare the Market, said: ‘The rise in zero-deposit mortgages is symptomatic of a market in which many buyers are finding it increasingly difficult to save, as rents, household bills and everyday costs continue to eat into disposable income.’
He added: ‘First-time buyers are turning to 100 per cent mortgage loans as a way onto the property ladder – particularly in regions like the North West and South West where demand was strongest last year.
‘Greater product availability and lenders cautiously re-entering this space may also be playing a role.’
No-deposit versus a 5% deposit mortgage
While the concept of getting on the property ladder without any deposit might seem appealing, buyers need to be cautious.
Putting down some money as part of a deposit will help to reduce your monthly mortgage repayments.
This is not just because the required mortgage is smaller, but because the choice of 95 per cent mortgages is bigger and rates will generally be lower than no-deposit deals.
According to Compare the Market’s analysis, the rate on Skipton Building Society’s 100 per cent five-year fixed Track Record Mortgage was 5.55 per cent as of 24 March 2026. By contrast, the rate on Skipton’s 95 per cent five-year fixed with a £999 fee was 5.28 per cent.
With a no-deposit mortgage on a 5.55 per cent rate, based on the average house price of £270,000 and a 30-year term, repayments would work out at £1,542 a month. Over the full term, a buyer would pay £284,944 in interest.
With a 5 per cent deposit and a 5.28 per cent rate, based on the average house price of £270,000 and a 30-year term, repayments would work out at £1,421 a month. Over the full term, a buyer would pay £255,122 in interest.
Compare the Market said: ‘This means that putting down a £13,500 deposit, 5 per cent of the average UK house price, versus taking out a 100 per cent mortgage could save buyers £29,822 in interest in the long run.’
Not putting down a deposit also comes with the risk of negative equity if house prices drop, which they are in some areas of Britain.
Negative equity is when the value of a home falls below the value of the mortgage the buyer has taken out on it, meaning they owe the bank more than the home would be worth if they sold it. This can make a property difficult to remortgage or sell, until the value goes back up again.
Nicholas Mendes, mortgage technical manager at John Charcol, said: ‘With no deposit, there is no equity cushion on day one, so buyers are more exposed if property values fall.
‘That can make it harder to remortgage or move later, and rates are usually higher than for someone buying with even a modest deposit. Buyers also need to be careful not to focus only on getting through the front door.
‘They need to be confident the mortgage remains affordable once you factor in bills, maintenance and what happens when the initial deal ends.’
Buyers also need to factor in cash required to pay for legal fees, a surveyor, moving costs and stamp duty if the purchase incurs it.