The No Deposit Mortgage is aimed at borrowers who are renting and cannot save for a deposit, and those without access to the Bank of Mum and Dad.
Long-term fixed rate lender April Mortgages will lend up to 100% of a property’s value at 4.49 times income, on fixed terms of 10 or 15 years.
The minimum income allowed for one applicant is £24,000, and up to two applicants under the age of 70 can be on the mortgage.
As with all of its propositions, the interest rate will automatically reduce as borrowers move into lower-LTV bands.
The No Deposit Mortgage has no early repayment charges (ERCs) for borrowers moving home and repaying the loan, or those redeeming in full using their own funds. Borrowers can make uncapped overpayments to reduce their balance faster.
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For those remortgaging, ERCs start at 9% and apply for the first two years of the 10-year term before falling incrementally, and for the first six years of the 15-year term.
The product is available on houses only, with a value between £75,000 and £2m, or £2.5m in Greater London.
April Mortgages will offer loans between £50,000 and £600,000.
There is a £195 application fee and £999 completion fee, with a free valuation for properties worth up to £1m.
April Mortgages said the longer terms would also give borrowers certainty and protect them from house price fluctuations in the short term.
Bridging the gap between the haves and have-nots
Rachael Hunnisett, director at April Mortgages, said: “Housing affordability has reached a crisis point in the UK, and it’s prospective buyers who are paying the price.
“The first rung of the property ladder is out of reach for people struggling to save for a deposit and those who have no Bank of Mum and Dad to fall back on.”
April Mortgages noted that house prices were continuing to rise, as well as rental prices, making it harder for people to buy a home.
This was also shown in the 10-year low in first-time buyer mortgage sales in 2023.
Hunnisett added: “Our 100% mortgage will help borrowers who have a strong credit history to achieve their dream of homeownership and help bridge the gap between the haves and the have-nots.
“A modern 10- or 15-year mortgage can help first-time buyers to lower their monthly payments over time and enables them to benefit from long-term payment security.
“The product also helps protect borrowers from the uncertainty of frequent remortgaging and the threat of payment shocks when a short-term fixed deal ends. As the past few years have shown, mortgage rates can move in either direction quickly and this product protects borrowers from the regular remortgage lottery.
“We have carefully designed this product with support from the regulator to ensure we are providing the best possible solution for first-time buyers, including minimising the risk of negative equity.
“A long-term mortgage can help protect homeowners from market volatility and ensure they have the best chance to build equity and have peace of mind over their budgeting for a period of 10 years or more.”
A ‘crucial time’ for a ‘much-needed’ product
Nick Mendes, mortgage technical manager at John Charcol, said: “April Mortgages’ No Deposit Mortgage arrives at a crucial time for the market. With house prices still near record highs and rental costs continuing to climb, saving for a deposit is an insurmountable challenge for many would-be buyers, particularly those without access to financial support from family.
“This product offers a much-needed alternative for financially responsible renters who have consistently managed their payments but have been locked out of the housing market. The ability to borrow up to 100% with a longer-term fixed rate provides both accessibility and stability, two things first-time buyers urgently need.”
He added: “What really stands out is the flexibility built into the product. Removing early repayment charges when moving home or making overpayments gives borrowers freedom and control, which is often missing from traditional longer-term fixes.
“It is a smart, well-structured product that addresses today’s affordability challenges head-on and will undoubtedly help more people take that first step onto the property ladder with confidence.”
Kate Fuller, business principle at Mortgage Advice Bureau (MAB), said the company was “really excited about the offering”.
Fuller added: “We know this will be so helpful to people who are currently only dreaming of owning a house, and have no way to save for a deposit, or access to family support. This will really give these customers a way forward. We haven’t seen 100% mortgages like this since 2008, so to see them finally return really shows how much positivity there is in the property market right now.”
This article was first published on our sister site, Mortgage Solutions. Read: Exclusive: April Mortgages launches 100% LTV product
