The number of zero-deposit mortgage sales reached 574 in the first three quarters of 2025, according to Financial Conduct Authority data obtained via a Freedom of Information request by Compare the Market.
This marks a sharp recovery from the low point of 135 recorded in 2022, following the market disruption linked to Kwasi Kwarteng’s mini-budget. Sales have since risen steadily, with 248 in 2023 and 423 in 2024.
REGIONAL DEMAND CONCENTRATED IN NORTH AND SOUTH WEST
The North West and South West recorded the highest number of 100% mortgage sales between January and September 2025, with 76 transactions each. These regions were followed by the East Midlands and Yorkshire and the Humber, both recording 67 sales.
By contrast, Central and Greater London saw relatively limited activity, with just 26 sales over the same period.
The figures suggest that demand for zero-deposit products is strongest in regions where property prices may be comparatively lower, but where affordability constraints still limit buyers’ ability to save.
COST DIFFERENCE BETWEEN 95% AND 100% LENDING
Despite the growing uptake, borrowers opting for 100% mortgages face higher costs over the long term compared to those able to put down even a modest deposit.
Based on an average UK house price of £270,000 and a 30-year term, a borrower taking a 100% mortgage at a rate of 5.55% would pay £1,542 per month, with total interest of £284,944 over the full term.
By comparison, a borrower with a 5% deposit accessing a 95% loan at 5.28% would pay £1,421 per month and £255,122 in total interest.
This equates to a saving of £29,822 in interest for those able to put down a £13,500 deposit.
Lower loan-to-value borrowing also provides borrowers with immediate equity in their property and access to a wider range of products, typically at more competitive rates.
FIRST-TIME-BUYERS DRIVING DEMAND
Charlie Evans, spokesperson at Compare the Market, said: “The rise in zero-deposit mortgages is symptomatic of a market in which many buyers are finding it increasingly difficult to save, as rents, household bills and everyday costs continue to eat into disposable income.
“First-time buyers are turning to 100% mortgage loans as a way onto the property ladder – particularly in regions like the North West and South West where demand was strongest last year. Greater product availability and lenders cautiously re-entering this space may also be playing a role.
“While 100% mortgages can remove the upfront hurdle of a deposit, they often come with higher rates – and even a 5% deposit could help to save borrowers nearly £30,000 over the long term. As ever, it comes down to individual circumstances, so shopping around for a competitive deal is key.”
David Hollingworth, associate director at mortgage broker L&C, added: “Lenders have increasingly sought to address the challenges that first-time buyers face. Saving for a deposit is certainly not easy, especially alongside higher rents and cost of living.
“The increased availability of mortgages for those with a small or no deposit can help to boost the chance of buying more quickly.
“If it is possible to get a deposit together, it will help to broaden the mortgage choices and improve the interest rates on offer. Typically, the bigger the deposit, the better the rates will be, which will make monthly payments more affordable.”
