I want to buy a home but have no deposit: how to start (guide)

Many would be buyers assume that owning a property is impossible without a large lump sum for a deposit. While a cash deposit still makes borrowing easier and cheaper, there are situations where you can move toward home ownership with little or no deposit. The key is to understand the types of schemes that exist in the UK, the risks involved, and how to make your overall financial position as strong as possible before you apply.

Understanding zero deposit mortgage options and risks

In the UK, true zero deposit mortgages are rare and usually come with strict conditions. Most standard lenders prefer you to contribute at least 5 percent of the property price as a deposit. When a lender offers a zero deposit mortgage, they are effectively taking on more risk because they are lending 100 percent of the value. To balance this, they may charge higher interest rates, apply tighter affordability checks, or restrict the types of buyers and properties that qualify.

Understanding zero deposit mortgage options and risks means looking beyond the idea of buying with nothing saved. If property values fall, you could quickly end up in negative equity, where your mortgage is larger than the value of the home. This makes it harder to move or remortgage. Some newer products are linked to a strong rental track record instead of savings, but they still require a solid income, clean credit history, and evidence that you can comfortably handle repayments over time.

Pros and cons of using a guarantor for a mortgage

One way to reduce the need for a cash deposit is to use a guarantor, often a parent or close relative. With a guarantor mortgage, a family member either offers part of their savings as security or allows a charge to be placed on their own home. This can give the lender extra comfort and may allow you to borrow a higher percentage of the property value, sometimes up to the full price.

The pros and cons of using a guarantor for a mortgage need careful thought. On the positive side, you may be able to buy sooner, avoid years of saving, and possibly access better interest rates than with other high risk products. On the negative side, your guarantor is legally responsible if you fall behind on payments. Their savings or property could be at risk. This can create emotional pressure in families, so honest conversations and, ideally, independent legal advice for everyone involved are important.

How rent to own housing schemes work for buyers

If a mortgage today feels out of reach, rent to own housing schemes can offer a stepping stone. Under these arrangements, you rent a home at a set price and have the option, but usually not the obligation, to buy it later. Part of your rent may be set aside as credit toward a future deposit. These schemes can be offered by housing associations, private developers, or local initiatives, and their rules vary.

To understand how rent to own housing schemes work for buyers, look closely at the agreement. Key details include how long you can rent before buying, how much of your rent is credited toward the purchase, and how the final price is decided. Some schemes fix the future price, while others base it on market value at the time you buy. If prices rise strongly, this can be an advantage, but if your income does not keep pace you may still struggle to secure a mortgage at the end of the rental period.

Tips for improving credit scores for low down payment loans

Even if you are aiming for a low deposit or no deposit route, your credit score remains crucial. Lenders want to see evidence that you handle borrowing responsibly. Some straightforward tips for improving credit scores for low down payment loans include registering on the electoral roll at your current address, paying every bill on time, and avoiding repeated applications for new credit in a short period.

It can also help to reduce existing debts, especially on credit cards and overdrafts, so that your overall monthly commitments are lower when a lender calculates affordability. Checking your credit reports with the main UK agencies can highlight errors, such as old accounts that should be closed or incorrect missed payments, which you can then challenge. Building a solid pattern of sensible borrowing and repayment over at least 12 months can make you look far more reliable to a mortgage underwriter, even if your savings remain modest.

Government grants for first time buyers with low savings

While the UK government does not generally offer grants that completely replace a deposit, there is support that can make saving less daunting. Government grants for first time buyers with low savings often come in the form of bonuses or discounts rather than cash handed over at the outset. The Lifetime ISA, for example, gives a 25 percent government bonus on eligible savings for a first home up to set limits, which can significantly boost the deposit you are working toward.

There are also schemes in parts of the UK that offer discounted purchase prices for first time buyers who meet certain criteria, such as the First Homes scheme in England, which sells some properties at a reduced price to local buyers or key workers. Shared ownership arrangements, where you buy a share and pay rent on the rest, can lower the deposit needed because it is calculated on the share you are purchasing, not the full market value. All of these options still require some savings and careful budgeting, but they can shorten the journey to ownership.

A realistic plan often combines several of these ideas. You might start in a rent to own home while building savings in a Lifetime ISA, or work on credit improvements while discussing a possible guarantor arrangement with family. Even if a true zero deposit mortgage is not right for you, understanding how lenders assess risk, how government support schemes operate, and how your own spending and borrowing habits look on paper can turn the goal of owning a home from a vague wish into a structured, step by step plan.