You Can Now Borrow Up to £1m With No Deposit, But When Does a 100% Mortgage Actually Make Sense?

A buyer can now apply to borrow the full purchase price of a home, with loans available up to £1m and no cash deposit, guarantor or additional property offered as security. For somebody with strong income but limited savings, that could bring a purchase forward by years. It could also mean paying a higher rate and owning a home with no equity cushion from day one.

The Intermediary reports that Gable Mortgages has launched a 100% loan-to-value range for eligible first-time and next-time buyers. The standard five-year fixed product is priced at 6.60%, with loans from £125,000 to £1m and terms from five to 35 years.

A second five-year fixed product is available at 6.40% on selected Barratt Redrow new-build developments. Financial Reporter confirms that the developer covers the product fee and standard valuation cost for eligible purchases through that proposition.

This is not a product for somebody who cannot afford the mortgage. Every applicant undergoes full underwriting, including income and expenditure assessment, credit review and interest-rate stress testing. The proposition addresses a different problem: borrowers whose earnings may support the debt but who have not built the deposit expected by most lenders.

The Deposit Problem Is Not Limited to Low-Income Buyers

Consider a couple earning £180,000 between them. Their income may support a substantial mortgage, but their savings can still lag behind house prices. They may have spent years in professional training, recently returned from overseas, paid high rent, funded childcare or concentrated on repaying student and professional debts.

A £700,000 purchase normally requires £35,000 even at 95% LTV, or £70,000 at 90%, before legal work, moving costs, surveys and any stamp duty. Saving that amount while renting and meeting family costs can be the barrier even where monthly mortgage affordability is comparatively strong.

The £1m maximum therefore matters. This is not only a route for the lowest-priced starter homes. It potentially brings higher-earning first-time buyers, professional couples and home movers with little usable equity into the conversation—subject to the lender’s affordability model and criteria.

No Deposit Does Not Mean No Money Is Needed

The mortgage may cover 100% of the accepted purchase price or valuation, but the buyer still needs to budget for costs outside the loan. Those can include legal fees, searches, surveys beyond the standard lender valuation, moving expenses, insurance, furnishings, repairs and stamp duty where applicable.

The standard Gable product also carries a product fee of 1% of the loan amount, which includes the standard mortgage valuation fee. On a £700,000 loan, 1% is £7,000. On the £1m maximum, it is £10,000. The reporting does not establish that the fee can always be added to the mortgage, so the treatment must be confirmed for the live case.

The selected Barratt Redrow proposition is different: the developer covers the product fee and standard valuation cost. That reduces those specific upfront costs, but it does not remove legal, moving and ownership expenses or make every Barratt Redrow property eligible.

What Could a £700,000 Mortgage Cost?

At the launch rate of 6.60%, a £700,000 repayment mortgage over 35 years would cost approximately £4,277 a month. This is an illustration using the stated rate and a level repayment calculation; it excludes the product fee, insurance and all other costs and is not a quotation or affordability result.

Borrowing 95% of the same purchase price would reduce the loan to £665,000 after a £35,000 deposit. At the same illustrative rate and term, the monthly repayment would be approximately £4,063—a reduction of about £214 a month. In practice, the 95% product could have a different rate and fee, so the true difference may be larger or smaller.

The comparison shows why “no deposit” is not the same as “no financial trade-off”. The deposit is replaced by additional borrowing. That increases the monthly payment, interest charged and sensitivity to future rates.

Negative Equity Is the Central Risk

A buyer using a conventional deposit begins with some equity, assuming the lender agrees with the purchase price. A 100% borrower begins with no deposit-funded cushion. If a £500,000 home falls by 5% soon after purchase, its value becomes £475,000 while the mortgage balance may still be close to the original loan.

That does not automatically create a problem if the borrower can maintain the payments and remain in the property. It becomes important if they need to sell, refinance or move before the balance has reduced or the value has recovered. The sale proceeds may not repay the mortgage and costs, requiring cash to complete the transaction.

New builds deserve particular attention because the lender’s valuation, developer incentives and the resale market can affect the value after completion. A buyer should choose the property because it works as a home and expect to hold it for a sensible period—not because 100% finance makes the purchase possible today.

A Five-Year Fix Provides Payment Certainty, Not Exit Certainty

The announced products are fixed for five years. That gives certainty over the initial mortgage rate and monthly payment, which can be valuable at high leverage. It does not guarantee that a competitive remortgage will be available when the fixed period ends.

By that point, the result will depend on the remaining balance, property value, income, credit profile and mortgage market. If the loan-to-value has fallen to 95%, 90% or lower through repayments and price growth, the borrower may have more options. If the property value has fallen, options may be restricted.

The early-repayment charges and reversion rate must also be checked before application. A five-year fix may be less suitable if the buyer expects to move, relocate or change the property substantially during the fixed period.

Affordability Is Still More Than an Income Multiple

The minimum income figures do not tell a buyer how much they can borrow. Lenders examine commitments, dependants, childcare, loans, credit cards, student-loan deductions, regular expenditure and the proposed term. Two applicants with the same salary can receive different outcomes.

At 100% LTV, disciplined underwriting is especially important because the lender has no deposit buffer. A strong credit history and stable income do not guarantee the desired loan if monthly expenditure leaves insufficient headroom under the stress test.

High earners can also be affected by bonus, commission, overtime, contracting or company-director income. Different lenders use different proportions and evidence. Willow’s guide to how lenders calculate mortgage affordability explains why a generic multiple is only a starting point.

First-Time Buyers and Next-Time Buyers Face Different Questions

A first-time buyer may use the product to move from expensive rent into ownership sooner. They need to assess whether the monthly mortgage, ownership costs and emergency reserve remain comfortable after completion.

A next-time buyer may have little usable equity because their property value has not risen, the existing mortgage remains high or selling costs absorb the remaining amount. A 100% mortgage could help bridge the deposit gap on the next home, but the sale proceeds, existing mortgage redemption and onward-purchase costs still need careful calculation.

The product does not erase a shortfall on the current property. If the existing home sells for less than the mortgage and costs, that deficit must still be addressed. Porting, early-repayment charges and the timing of the sale and purchase can also affect the structure.

What Is Different About the New-Build Option?

The 6.40% product is available on selected Barratt Redrow developments rather than across the entire new-build market. Its lower launch rate and developer-paid product and standard valuation fees can make it look more attractive than the standard proposition.

The buyer should still compare the property price, incentives, service charges where relevant, build warranty, snagging, estate charges, likely resale demand and the mortgage’s full terms. A fee paid by the developer is not free if the overall property and finance package is less suitable than an alternative.

Developers and estate agents can introduce the option, but the buyer should receive mortgage advice focused on their circumstances and the wider market. The finance should support the property decision rather than turn availability into the reason for buying.

When Can a 100% Mortgage Make Sense?

The strongest case is a creditworthy buyer with stable, demonstrably affordable income, limited deposit savings and a clear reason to purchase now. They should expect to remain in the property, retain an emergency reserve after costs and understand that moving or refinancing could be difficult if values fall.

It may be particularly relevant where rent is high, savings are accumulating slowly and waiting several years would not materially improve the position. It may also help a home mover whose income supports the next mortgage but whose current sale produces little usable equity.

It is less convincing where the monthly payment is already tight, the buyer would have no emergency fund, the property is likely to be held briefly, employment is uncertain or the decision depends on house prices rising. A mortgage that passes the lender’s assessment can still be uncomfortable for the household.

What Should You Compare Before Applying?

Start with the purchase price, realistic monthly budget and cash available after all transaction costs. Then compare the 100% product with the live 95% market and any appropriate family-assisted structures. Show the rate, product fee, monthly payment, total cost during the fixed period and position if the property value falls.

Do not use every available pound for fees and leave nothing for repairs or emergencies. The absence of a deposit can be most valuable when it allows the buyer to retain a sensible reserve—not when it enables a purchase at the absolute edge of affordability.

Finally, test the likely holding period. If the home should remain suitable for several years and the payment is resilient, the lack of an initial deposit may be manageable. If another move is likely soon, the transaction costs and negative-equity risk deserve greater weight.

How Willow Private Finance Can Help

Willow can carry out a Deposit vs Affordability Review through its residential mortgage service. We assess the desired property, income, commitments, deposit position, cash reserves, timing and future plans before comparing appropriate lenders and structures.

That can include 100% and 95% mortgages, gifted deposits, family-assisted lending, joint-borrower sole-proprietor structures and lower-LTV alternatives. We compare the complete cost and household position rather than recommending the zero-deposit route simply because it is new.

For first-time buyers, Willow’s first-time-buyer mortgage guide and deposit guide explain the wider purchase process and evidence required. Product availability, rates and criteria can change, so a recommendation must be based on the live market and full application.