Zero-deposit mortgages surge as UK lenders open doors for first-time buyers
More UK lenders are now offering zero-deposit mortgages to help first-time buyers enter the property market. Over the past year, five major banks and building societies have launched similar schemes, targeting areas with high demand. These deals aim to ease the pressure on young buyers struggling to save for a deposit amid rising house prices and interest rates.
The latest option comes from Melton Building Society, which has expanded its five-year fixed mortgage at 5.99% with no deposit required. Initially tested in the East Midlands, the product is now available across the UK without needing a guarantor or family property as security.
Melton's zero-deposit mortgage includes a £199 application fee but offers £199 cashback upon completion. The society's CEO, Simon Taylor, highlighted the need for innovation to break down barriers for aspiring homeowners. While the deal removes the deposit hurdle, monthly repayments may still be higher than those for mortgages with a deposit.
Other lenders have also introduced low-deposit options. Santander now provides a 98% mortgage for buyers with at least £10,000 saved. Meanwhile, Nationwide, NatWest, Barclays, HSBC, and TSB have rolled out zero-deposit schemes in high-demand regions like London, the South East, and Scotland.
Industry experts remain optimistic. Kylie-Ann Martin of KAG Financial predicts 2026 will be a stronger year for first-time buyers, thanks to more choices and lower current mortgage rates. The shift follows years of challenges, as soaring property prices and high borrowing costs have locked many out of the market.
The expansion of zero-deposit mortgages provides new routes into homeownership for those unable to save large sums. With multiple lenders now offering such deals, more buyers may qualify despite ongoing affordability pressures. The long-term impact will depend on how borrowers manage higher monthly costs compared to traditional mortgages.
