A mortgage loan with no deposit is becoming a more visible choice again, but the rebound is not simply a sign of easier access. It also reflects how stretched household finances have become. FCA data show sales of 100% mortgages climbed to a five-year high in the first three quarters of 2025, even as borrowers continue to face a trade-off between entering the market faster and paying more over time.
Why the latest surge matters now
The FCA figures, obtained through a Freedom of Information request by Compare the Market, show 574 no-deposit mortgages were sold between January and September 2025. That was well above 423 in 2024 and 248 in 2023, and it surpassed the 452 recorded in 2021. The sharpest dip came in 2022, when sales fell to 135 during the year of former chancellor Kwasi Kwarteng’s mini-budget.
The rise matters because it points to a market response to affordability pressure, not just renewed appetite for risk. Buyers are using a mortgage loan with no upfront deposit to overcome the initial barrier to ownership, but the data also underline how expensive that route can be over the life of the loan.
Regional pressure is shaping demand
The North West and South West recorded the highest volumes of zero-deposit sales over the period, followed by the East Midlands and Yorkshire & Humber. That regional pattern suggests the demand is not evenly spread; it is concentrated where first-time buyers appear to be leaning hardest on lenders offering 100% loan-to-value products.
Compare the Market said borrowers may pay more over the full term when taking a 100% loan because rates can be higher and the range of 95% loan-to-value mortgages is broader. In other words, a mortgage loan that removes the deposit hurdle can still increase total borrowing costs, even if it speeds up the move onto the property ladder.
What the numbers show about long-term cost
The comparison offered by Compare the Market makes the trade-off clearer. Skipton Building Society’s 100% five-year fixed Track Record Mortgage was priced at 5. 55% as of 24 March 2026, while its 95% five-year fixed mortgage with a £999 fee was quoted at 5. 28%.
On a £270, 000 purchase over 30 years at 5. 55% with no deposit, monthly repayments would be £1, 542 and total interest would reach £284, 944. With a 5% deposit and a 5. 28% rate, monthly payments would fall to £1, 421 and total interest to £255, 122. On those assumptions, a £13, 500 deposit would reduce total interest by £29, 822 over the term.
That calculation does not make one option universally better. It does show why the decision can be shaped as much by cash flow as by headline access. For some households, a mortgage loan with no deposit may be the only realistic path to ownership; for others, even a modest deposit can materially change the cost profile.
Expert views on the return of 100% lending
“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, ” said Charlie Evans, money expert at Compare the Market.
“First-time buyers are turning to 100% 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, ” Evans said.
“While 100% mortgages can remove the upfront hurdle of a deposit, they often come with higher rates – and even a 5% deposit could help to save borrowers nearly £30, 000 over the long term. As ever, it comes down to individual circumstances, so shopping around for a competitive deal is key. ”
David Hollingworth, associate director at mortgage broker L& C, said no-deposit mortgages are one way lenders are trying to address the challenges faced by first-time buyers.
“Saving for a deposit is certainly not easy, especially alongside higher rents and cost of living, ” he said. “The increased availability of mortgages for those with a small or no deposit can help to boost the chance of buying more quickly. ”
He added that if a deposit can be assembled, it broadens mortgage choices and can improve the rates on offer.
A broader signal for the housing market
The latest figures suggest the zero-deposit market is no longer a niche corner of lending. Instead, it is re-emerging as a pressure valve for borrowers who cannot bridge the gap between rents, day-to-day bills and a deposit target. The scale of the rebound in mortgage loan sales also hints at a market where access and affordability are diverging: the first may be improving for some buyers, even as the second remains strained.
That leaves a central question hanging over the next phase of lending: if no-deposit products keep expanding, will they become a bridge into homeownership, or a more expensive route that buyers accept because they have no better alternative?
