HOW RENTERS CAN BUY A NEW BUILD HOME WITHOUT A BIG DEPOSIT
Renters can buy homes with little to no deposit through guarantor and Rent-to-Own mortgages, family deposit schemes, or low-deposit options like Shared Ownership (5-10% deposit) and First Homes (30-50% discounts). You’ll need a stable income, family support, and £3,000- £5,000 for purchase costs. Best for renters paying high rent who could afford mortgage payments but struggle to save large deposits.
It’s more possible than you think…
If you’re renting now, you’ve probably done the maths. You’ve seen house prices, calculated deposits, and thought, “There’s no way I’ll save that up while paying rent!” Well, you’re not alone – many renters feel stuck, watching prices rise as savings grow slowly. If that sounds all too familiar and you’ve been wondering exactly how much deposit you need for a house, well, this answer might surprise you. Some schemes let you buy a house with a zero deposit mortgage – yes, that’s correct, £0 upfront.
Before you think this sounds too good to be true, let’s be clear: these schemes aren’t magic, they come with conditions, and they’re not right for everyone. But for some first-time buyers, they could be the key to getting on the property ladder years earlier than traditional saving would allow. Let’s unpack exactly how many of these schemes work, who they’re suitable for, and what you really need to know before getting excited.
What actually is a 0% deposit mortgage?
Let’s start with the big one. A 0% deposit mortgage (sometimes called a 100% mortgage) means exactly what it says on the tin: you borrow the full purchase price of the property with no deposit required. Zilch. Nada.
Now, before you start browsing Rightmove, note that these aren’t widely available, unlike standard mortgages. You can’t just walk into any high-street lender and ask for one. Of course, they’re offered on a conditional basis to give the lender confidence to lend you 100% of the property value. These conditions usually involve family support or are tied to particular property types, such as new builds.
Guarantor mortgage
A guarantor mortgage lets you buy a home with no deposit if someone – usually a family member or friend – guarantees your mortgage repayments. If you miss payments, the guarantor covers them. This option suits first-time buyers with steady incomes who haven’t saved a large deposit and have a poor credit score.
Your guarantor must be a UK homeowner with good credit and able to cover your payments if needed. Some lenders even require their property as security; others want savings locked in an account. Arrangements usually last three to five years or until you build equity, at which point the guarantor is released from obligation.
Family deposit mortgage
A family deposit mortgage is similar to a guarantor mortgage, but in this case, it allows a family member to place savings (typically 10-20% of the property value) into an account held by your lender. This acts as security, enabling you to borrow up to 100% of the property’s value without a deposit. Your family member’s money remains theirs throughout, though it earns little or no interest while locked away.
After typically three to five years, once you’ve built enough equity, the savings are returned in full. Unlike a guarantor, your family isn’t responsible for repayments; their only role is to keep their money untouched. This is popular with new build schemes, where developers work with lenders to arrange it.
Rent-to-Own Mortgage
A Rent-to-Own mortgage is a type of 0% deposit mortgage aimed at renters who’ve shown they can keep up with regular payments, but haven’t been able to put aside a large deposit.
Rather than focusing on savings, lenders look at your rental track record (typically the last twelve months of history) to see how consistently you’ve paid, and what you can comfortably afford. If you’ve been paying your rent in full and on time, the history can help demonstrate you’re ready for repayments at a similar level.
From the day you complete, the home is yours – you’re not waiting to buy or working towards ownership in the background. You move in as a homeowner, and your monthly mortgage payments go towards owning your home rather than paying a landlord.
These mortgages are usually available on selected new-build homes and often come with fixed-rate periods, helping you plan ahead with more confidence during the early years of homeownership.
Who are these schemes suitable for?
A 0% deposit mortgage isn’t always the best option, even if you qualify. Let’s be clear about who these schemes actually help.
You’re a good candidate if:
- You have a stable income and a solid employment history.
- Your monthly rent is similar to (or more than) what your mortgage payments would be
- You’ve demonstrated you can budget responsibly and save consistently, even if slowly.
- You have family willing and able to help as guarantors.
- You’re buying in an area where property values are stable or rising.
- You plan to stay in the property for at least five years.
You should probably think twice if:
- Your income is unstable or uncertain.
- You’re already struggling to manage monthly bills.
- You have no emergency savings whatsoever.
- You might need to move for work in the next few years.
- You’re buying purely because everyone else is, not because it makes financial sense for you.
Just a word of caution: if you borrow 100% of the property value, you start with zero equity (the portion of the home you own outright). If house prices fall, you risk negative equity – owing more than your home is worth. This can make selling or remortgaging difficult and can leave you feeling trapped.
What you still need to budget for
Don’t let the “free deposit” idea distract you – buying a home still involves other costs that catch first-time buyers off guard.
Immediate costs include:
- Legal fees (typically £1,000-£2,000).
- Surveys and valuation fees (£300-£600).
- Mortgage arrangement fees (often £1,000+).
- Moving costs.
Realistically, you’re looking at £3,000-£5,000 in costs beyond the deposit, even with a 0% scheme. And that’s just to get the keys.
Then there’s the ongoing reality:
- Buildings and contents insurance.
- Council tax.
- Utility bills (often higher than in rented flats).
- Maintenance and repairs (sorry, the landlord isn’t fixing things anymore – you are).
- Service charges if you’re buying a flat.
For such, be prepared with an emergency fund. Life happens – boilers break, roofs leak, washing machines go kaput. Without savings to cover these surprises, you’ll be reaching for credit cards, which often defeats the purpose of getting on the ladder in the first place.
Low deposit schemes
Aside from the no-deposit-required schemes, there are many that allow you to purchase a house with typically 5% or less down.
Deposit unlock scheme
This is where new-build homes come into play. Some developers participate in schemes designed to help secure a mortgage with a 5% deposit on eligible new-build homes. The housebuilder provides mortgage guarantee insurance, which protects the lender in the event of default. This insurance allows lenders to offer better rates and accept smaller deposits than they normally would.
While 5% isn’t zero, it’s significantly more achievable for renters than the traditional 10-20% target. On a £200,000 home, that’s £10,000 instead of £20,000-£40,000 – potentially shaving years off your saving timeline.
Shared ownership
Shared ownership allows you to purchase a portion of a property’s total market value, typically between 10% and 75%, while paying a reduced rent to a landlord for the remaining share at a lower cost. You can gradually acquire larger shares until you ultimately own the entire property. The amount of rent you pay is determined by the landlord’s share, meaning that the more shares you purchase, the lower your rent costs will be.
This scheme requires a 5%-10% deposit and is available to individuals with a household income of £80,000 or less (£90,000 or less in London). You can use either a mortgage or savings to buy your share, rendering it a valuable possibility for those seeking a solid foothold in the housing market and for low- and middle-income households pursuing a more affordable path.
First Homes Scheme
The First Homes initiative provides newly constructed properties at a minimum discount of 30% off the market price. In certain regions, local authorities may, depending on eligibility requirements, increase this discount to 40% or even 50%.
You buy a new build at a lower price, but there are some caveats. Your total household income must be £80,000 or less outside of London (£90,000 within London), and at least half of the purchase price must be financed by a mortgage. Additionally, the property must be your sole home and primary residence, and its price, after the discount is applied, must not exceed £250,000 (£420,000 in London).
It’s not a loan that needs to be repaid, nor is there any rent to pay – it’s a genuine price reduction. This implies that, with a 30% discount, individuals looking to buy a home valued at £250,000 will ultimately pay £175,000.
How to save for a house deposit
Even if you’re pursuing a 0% deposit mortgage, having some savings makes the process easier and demonstrates to lenders that you can manage money responsibly. So, how can you save for a house deposit while renting?
Practical saving strategies:
- Set up a separate savings account and automate transfers on payday.
- Round up everyday purchases and save the difference.
- Channel windfalls (tax rebates, bonuses) straight into savings.
- Cut one major expense – whether that’s eating out, subscriptions, or expensive commutes.
- Consider a side hustle specifically for saving for a house.
Lifetime ISAs deserve special mention. If you’re a first-time buyer aged 18-39, the government adds a 25% bonus to whatever you save, up to £4,000 per year. Save £4,000, get a £1,000 bonus. That’s genuinely free money toward your deposit. As Martin Lewis at MoneySavingExpert notes, LISAs can be excellent for first-time buyers saving for a deposit, though they do come with restrictions on when and how you can use the money.
When you’re wondering how to save for a home deposit, the honest answer is simple: it’s consistent, modest amounts over time. Saving £200 per month gives you £2,400 annually – with a LISA bonus, that’s £3,000 toward either a deposit or those essential buying costs.
Your next steps toward homeownership
The question “how to buy a house without a deposit” now has real answers, which is genuinely exciting for renters who thought homeownership was impossible. But these schemes aren’t magic wands – they’re financial tools with specific applications, benefits, and risks.
If you’re earning decent money, paying high rent that could easily cover a mortgage, and have a family willing to help, a 0% deposit scheme could fast-track you onto the property ladder. For renters watching their savings disappear month after month as house prices rise faster than they can save, this could be genuinely life-changing.
If you are considering a new build in 2026, Wain Homes offers a range of quality properties nationwide. Contact our team to discuss your options, arrange viewings, and start your journey to homeownership.
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