No Deposit New Build Mortgage
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No Deposit New Build Mortgage
Can I get a mortgage with no deposit on a new build property?
Surprisingly, the answer is yes, you can – subject to status and criteria, obviously. There is a lender now offering 100% Loan to Value on new build properties.
This is quite a recent change. As you mentioned, we’re in May 2025 and you can now buy a new build with no deposit.
How much can I borrow with no deposit for a new build property?
The minimum loan size would be £125,000 and the maximum is £1 million, but the amount you can borrow is typically capped around 4.49 times your income.
Of course, it’s not a straightforward calculation. You just don’t multiply your income by that, because it’s also based on your outgoings – such as loans, car finance, credit cards or student loans.
Interestingly, you can actually borrow more if you’re a key worker. The limit is five times for people including armed forces personnel and NHS clinicians – such as nurses, paramedics, and doctors. Firefighters, teachers, childcare providers and university lecturers also qualify, and police, prison officers and bus drivers are on that list, too.
If you’re both key workers, you may be able to borrow up to 5.5 times your income. That’s a possibility with one of the lenders that offers no deposit mortgages on new builds.
Can I get a no deposit mortgage for a new build property if I’m a First Time Buyer?
Yes, you can. If you’re a First Time Buyer wanting to buy a new build and you’re struggling to save for that deposit, there is an option available to you.
Again, those minimum and maximum loan limits of £125,000 and £1 million are in place, along with the amount you can borrow based on your income.
There are a couple of things to mention here. It would have to be a five-year fixed rate as a minimum, and the maximum loan term is 35 years. One thing that some people may not know is that you have to be at least 23 years old, and you would also need a fantastic credit history and credit score.
Do I need a guarantor for a mortgage with no deposit?
No, you don’t need a guarantor for a no deposit mortgage on a new build property. As long as you pass the eligibility criteria, your income is sufficient, your credit history is excellent and we can evidence all that, then you don’t need anyone supporting the application.
You may want a guarantor, though – and there may be options for that, but it’s not a necessity. You can do it on your own as long as your income is sufficient and your credit history reflects that you’ve managed your money well in the past.
How is affordability calculated for no deposit mortgage on a new build?
These lenders work out affordability the same way as all mortgage lenders. They have their own affordability calculation that takes into account your income, your outgoings and your household makeup – whether you’re single or a couple, and whether you have children.
They work out your affordability in exactly the same way as if you had a deposit. The approach and calculation is specific to each lender. Just because you don’t have a deposit, you’re not treated differently.
In terms of affordability, you can typically borrow 4.49 times your income, and outgoings are then subtracted from that.That goes up to five times if one of you is a key worker and 5.5 times if you are both key workers.
It’s not as simple as just multiplying your salary by that, as other factors are involved, but this is the Loan to Income limit lenders are using.
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Can I get a mortgage with no deposit on a new build property with bad credit?
If you have bad credit, no – you won’t get a no deposit mortgage on a new build. That’s not going to happen. You need a really excellent credit profile for any form of no deposit mortgage.
Do no deposit mortgages have higher interest rates?
In comparison to mortgages where you have a deposit, yes, they are slightly higher in some cases, although not by much. It’s surprising. We’re recording this in May 2025, and the difference between having a 5% deposit and no deposit is not as big as people realise.
That may change in the future, of course, and we can’t talk about what rates are now because they’re changing all the time.
What are the pros and cons of a no deposit on a new build property?
The upside of a no deposit mortgage on a new build property is that you can buy a brand new home without having to save for years to build up that deposit. You can just go ahead and get a new home, which is great.
One downside, however, is that you may face negative equity – and that’s particularly notable with new builds. New build property is similar to buying a new car. We all know you pay a premium for a new car and that’s the same for a new build.
As soon as you drive a car off the forecourt, it loses value. And with a new build property often, in the first year or 18 months, those property values may come down a touch because you’re paying a premium for something that’s brand new.
You could therefore face negative equity, where the mortgage total is higher than the value of the property. No deposit mortgages typically come with longer fixed rates to lessen that risk, but it’s still a concern you should be aware of.
So there are downsides, but the upside is that you avoid taking two, three or five years to save that deposit. It’s a balancing act. It’s not going to be for everyone, but it is an option.
How do I apply for a mortgage on a new build with no deposit?
The first thing to do is, of course, speak to a broker. These types of mortgages are only available via mortgage brokers.
We would go through a detailed assessment of your income and outgoings, with a questionnaire to establish all the necessary facts, and then we look at whether you would be eligible for this type of mortgage product.
It’s important to understand that not every single new build site and developer is eligible for this. The lender offering these mortgages has a list of developers that they work with. It’s not going to be just any property, anywhere.
So it’s really vital to speak to a mortgage advisor to understand what you can and can’t do. The last thing you want to do is start looking at new builds and putting down reservation fees only to find that they’re not on the list.
You’ve demonstrated how a mortgage broker can help. What else should we know about buying a new build with no deposit?
The main thing with no deposit mortgages is that it’s important to get independent advice. It really is vital. Not just because these mortgage products are only available via mortgage brokers, but because it’s potentially a big risk.
There’s that negative equity aspect, because you’re borrowing the entirety of the value. It’s really important that someone with experience sits down and talk you through the pros, cons, and pose possibly uncomfortable questions to confirm whether this will be appropriate.
It’s not right for everyone and not everyone is eligible. But for someone in the right circumstances, it can be a lifeline. It’s a way out of paying thousands of pounds in rent – or, if you’re unable to save up the deposit and you’re living in your parents’ home, this could be an option for you. It gives people options and choice.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.