No Deposit Mortgage

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Jargon Buster

E-mail: Mortgage Arrangers

No deposit mortgages and mortgage illustrations from other lenders, are available here.

CLICK HERE and send your details for a no deposit mortgage quote to be e-mailed back to your computer for printing off - this is a free service.

One of the most asked questions over the years has been "where can I get a no deposit mortgage?"

Up until the early 1990's the only option available was a 100% mortgage and you had to jump through hoops to get it. Lenders like National Provincial, Bank of Scotland and the Royal Bank of Scotland ruled the roost and could pick and choose who they wanted to deal with.

Then in one of those magic , and probably in hind sight, obvious observations someone concluded that there was a large number of mortgage borrowers that were getting their mortgage deposit by borrowing it from another bank at the same time as submitting their mortgage application.

It was a beautiful ruse that had been going on behind the mortgage lenders backs for years.

People who could not qualify for the 100% mortgage (mainly because of restricted income multiples, and credit score) could qualify for a 95% mortgage, but that left them with a deposit to find.

After a bit of investigation one lender decided to make it easier for those borrowers with no deposit to put down, and invented a mortgage product that not only gave them their deposit, but a bit extra as well, to pay for solicitors, furniture etc.

Overnight the " NO DEPOSIT MORTGAGE " was born, and the market place has never been the same since.

No Deposit Mortgage Basics:

1. For a no deposit mortgage you need to be in gainful employment or self employed with 3 years accounts.

2. One of the main criteria for a no deposit mortgage is a clean credit search through such agencies as Experian and Equifax

3. Your residential history needs to be traceable for at least 3 years for a no deposit mortgage.

4. Up to 95% of the value of the property is a secured mortgage. The remainder is an unsecured loan of up to £30,000 which is at the same interest rate as the secured mortgage.

5. In effect it means the no deposit mortgage is more than 100% (in fact it can go as high as 125% of the value of the property that is being mortgaged)

6. The interest rates are not as competitive as mortgage where the borrower has a deposit

7. If the mortgage is paid off in part (say, for example, by selling the property earlier than expected) and the whole of the outstanding balance owed is not cleared, then the balance is converted in to a normal bank loan, and subsequently a higher interest rate is applied. This is made quite clear in the lenders mortgage contract.

8. The extra money that can be borrowed on a "no deposit mortgage" can be used for any legal purpose, and can be above and beyond that needed to fund the deposit

No deposit mortgages are easy enough to obtain, once the paperwork application has been mastered, however, the lenders look unlikely to ever win a "plain speaking" award, and for this reason anyone looking for a no deposit mortgage should use a no deposit mortgage broker

No deposit mortgage quotes available by email


No deposit mortgages at fixed and variable interest rates

E-mail: Mortgage Arrangers