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Until recently, Conroy, 32, and his partner Amber, 28, had little hope of ever owning their own home. Working and renting in central Manchester, they found saving for a deposit beyond their reach. Their situation changed when they discovered a less common, though somewhat riskier, mortgage option. The Track Record mortgage from Skipton Building Society offers a 100% mortgage, meaning borrowers pay no deposit upfront. While this product demands strict eligibility requirements and charges a higher interest rate—5.33% fixed for five years in their case—Conroy and Amber embraced the option. Last August, they successfully purchased a four-bedroom house in Swinton on Manchester’s outskirts for £242,000. Conroy, a video editor, admits, “I don’t think it’s dawned on us it’s really ours.”
The availability of low-deposit mortgage deals has notably increased in the UK. Data from the Bank of England reveals that the portion of mortgages with deposits under 10% is currently at its highest level since 2008, a time when such loans were common. Despite this, first-time buyers typically put down an average deposit of around 20%. Several lenders, including Lloyds, Santander, Skipton, and Yorkshire Building Society, have recently introduced mortgage products offering 95% to 100% of a property’s value. These initiatives aim to assist buyers struggling to save amid rising house prices. However, these deals come with strings attached: they often have higher interest rates, are limited to certain borrowers or properties, and carry additional risks that applicants must consider.
Conroy and Amber secured a 25-year mortgage with monthly payments of £1,500, which is roughly equivalent to their previous rent. They feel comfortable managing the increased cost thanks to their solid incomes and anticipation of wage growth. Nevertheless, Conroy acknowledges the greater risk associated with no- or low-deposit mortgages—that of negative equity, where a property’s value drops below the outstanding loan balance. This situation can force homeowners into challenging financial decisions if they must sell unexpectedly. To mitigate risk, the couple plans to overpay their mortgage during the first five years to build equity sooner. Conroy expresses cautious optimism about their area’s property market: “There is always the element of a gamble with the property market,” he says. “But I have researched the area we moved to and don’t think house prices are going to drop.”
Another pair, Bronya, 27, and George, 29, also took advantage of a low-deposit mortgage to buy their home in Rhuddlan, North Wales, in August. Lloyds provided £258,000 on a 33-year loan, covering about 98% of the house’s value, with the couple putting down just £5,000 themselves. Their interest rate stands at 5.89%, fixed for five years, and their monthly repayments of £1,400 are comparable to what they had been paying for a one-bedroom rental. Bronya, a civil servant, explains that while they could have made a larger deposit, they preferred to keep more savings available for a £20,000-plus renovation project. Aware of the risks, the couple nevertheless expects that renovating will increase their home’s value. George adds, “We also plan to stay here our whole lives,” indicating their readiness to weather any market fluctuations
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