We bought our £242,000 home without a deposit - here's how

A 32‑year‑old video editor, Conroy, and his 28‑year‑old partner Amber bought a four‑bedroom house in Swinton, on Manchester’s outskirts, for £242,000 using Skipton Building Society’s “Track Record” mortgage, which finances 100 % of the purchase price with no upfront deposit. To qualify, they had to pass strict eligibility checks and accept a higher interest rate of 5.33 % fixed for five years. Their 25‑year loan requires monthly repayments of about £1,500, roughly the amount they were paying in rent, and they intend to overpay the mortgage during the fixed term to build equity. Both acknowledge the heightened risk of negative equity—where the property’s market value falls below the outstanding loan—but feel confident because of their earnings and research indicating stable house prices in the area.

The rise of low‑deposit mortgages reflects a broader shift in the UK market, where the proportion of loans with deposits under 10 % of the property value has reached its highest level since the 2008 financial crisis, according to the Bank of England. Lenders such as Lloyds, Santander, Skipton and Yorkshire Building Society have introduced products covering 95 % to 100 % of a home’s value to help first‑time buyers who struggle to save amid rising property prices and cost‑of‑living pressures. These products carry higher rates and are subject to tighter affordability checks; for example, borrowers must demonstrate a year of consistent rent payments and six months of credit repayments, and some lenders exclude new‑build or shared‑ownership homes from their low‑deposit schemes. While the current safeguards are stronger than those that contributed to the 2008 crisis, experts warn that borrowers must still consider the potential for interest‑rate rises and the long‑term financial commitment.

Other couples have taken similar routes. Twenty‑seven‑year‑old civil servant Bronya and her 29‑year‑old partner George secured a 98 % loan from Lloyds for a four‑bedroom house in Rhuddlan, North Wales, putting down only £5,000 and paying a 5.89 % fixed rate for five years, with monthly repayments of £1,400—comparable to their previous rent. They chose to preserve savings for a £20,000 renovation, hoping the improvements will raise the home’s value, and plan to remain there long term to weather any market dips. Mortgage brokers note that, despite stricter checks, these high‑loan‑to‑value products still carry inherent risks, urging borrowers to scrutinise monthly payment affordability and be prepared for possible interest‑rate increases as they navigate the evolving housing market.

⚡ Effects Interpreter