What is Skipton Building Society's 100% Mortgage?

How Skipton’s 100% mortgage works

Skipton’s 100% mortgage is designed for renters who can afford monthly repayments but don’t have a deposit saved. Here’s an overview of how the product currently works:

1. Mortgage rate and term

• The mortgage is a five-year fixed-rate deal, meaning your interest rate stays the same for the first five years.

• After the fixed period ends, your mortgage usually moves to Skipton’s standard variable rate, unless you remortgage.

2. How your borrowing limit is calculated

Skipton uses your current rental payments to help determine affordability. Your monthly mortgage payment can’t be higher than your monthly rent. For example, if your rent is £1,500, your mortgage payment must be £1,500 or less.

3. Deposit rules

This mortgage is specifically for buyers with little or no deposit.

• You can apply with no deposit at all.

• If you do have savings, your deposit must be 5% or less of the property price to qualify for a 100% product.

Eligibility criteria

To apply for Skipton’s 100% mortgage, you must meet the following requirements:

• You’re aged 21 or over

• You’re a first time buyer or haven’t owned a UK property in the last three years

• You’ve paid rent for 12 consecutive months within the last 18 months

• You’ve paid utility bills

• You request a loan amount of £600,000 or less

• You’re not buying a property in Northern Ireland

• You’re not buying a new build flat

If you’re a joint applicant, you must prove that all rent has been paid either by one applicant or collectively for 12 months in a row, within the last 18 months. If you’ve been renting separately, you must prove you’ve all paid your rent.

Find a full list of eligibility requirements on Skipton’s website.

Read our guide for information on how you can improve your chances of getting a mortgage.

Pros and cons of 100% mortgages

A 100% mortgage can help buyers get on the property ladder – but it’s important to weigh up the advantages and disadvantages.

For more information on mortgage risks, visit the Financial Conduct Authority (FCA).

Is a 100% mortgage right for you?

Whether a 100% mortgage is right for you depends on your individual circumstances. Some questions that may be worth asking before applying or committing to a 100% mortgage include:

1. Can you comfortably afford the monthly payments?

Lenders will check that your monthly repayment is manageable and in line with what you already pay in rent. This helps lenders understand whether you typically pay rent on time and how you might manage repayments if bills rise or your circumstances change.

If you’re looking to improve your financial readiness, you can find more information in our guide on preparing for a mortgage.

2. Are you planning to stay put for a while?

A 100% mortgage is typically associated with buyers who expect to stay in their home for several years. This is because:

• Moving too soon can make it harder to build equity.

• Property values can rise or fall.

3. Do you have a stable income and lifestyle?

Because there’s no deposit to cushion your equity, lenders look closely at financial stability. Things you could think about include:

• Is your job stable and secure?

• Are you expecting major life changes in the next few years?

• Are your monthly bills and spending predictable?

4. How do you feel about financial risk?

100% mortgages can help you get on the property ladder sooner, but they usually come with higher interest rates and a greater risk of falling into negative equity. This can happen if house prices drop and you end up owing more on your mortgage than your home is worth.

5. Is a 100% mortgage the only way to buy right now?

If saving a deposit would take years, a no-deposit option might help you move sooner. However, if you could save a small deposit, that might open lower-rate mortgage deals.

Read our guide for more information on finding a mortgage that suits your circumstances.

What to consider before applying

Before applying for a 100% mortgage, it may be worth checking a few key areas to see if the product is a good fit for your finances and long-term plans. You could consider:

• Checking your credit score. Is your credit history is clean, stable and up to date? A stronger score can improve your chances of meeting affordability criteria.

• Confirming your income stability. Are your earnings reliable and likely to continue? Lenders look closely at steady employment and predictable monthly income.

• Reviewing your monthly affordability. Can you comfortably cover the mortgage repayment, plus bills, insurance, and unexpected costs? Your payment will be based on your current rent, so confirm that amount fits your long-term budget.

• Understanding how fixed rates work. A five-year fixed rate offers payment certainty, but you’ll be locked into the deal. Early repayment charges may apply if you move or remortgage before the term ends.

• Factoring in future life changes. Do you have any plans that might affect your finances during the fixed period?

• Building a safety buffer. Even without a deposit, having emergency savings can help protect you against unexpected expenses or income changes.

For more information on managing money and making informed mortgage decisions, you can visit MoneyHelper.

Alternatives to 100% mortgages

If you’re a first time buyer but don’t meet the criteria for a 100% mortgage, you may be eligible for other low-deposit schemes:

• Deposit Unlock. A scheme that can let eligible applications buy a new build home with just a 5% deposit, backed by developers and mortgage lenders.

• Deposit Boost. If you’ve saved a 5% deposit, Deposit Boost can increase it by an additional 5%, giving you a total deposit of 10%.

• Bank of Family. Parents or family members can support your purchase by helping you save a deposit, acting as guarantors, or joining the mortgage as co-applicants. Some housebuilders may offer up to a 5% deposit boost of the purchase price.

• Key Worker Deposit Contribution. If you’re a key worker, some housebuilders may contribute £1,000 towards your deposit for every £20,000 you spend on your new home.

• Own New – Rate Reducer. A scheme that lets you access lower mortgage rates and reduced monthly payments on selected newbuild homes.

Our mortgage advisor says…

‘Skipton’s 100% mortgage can be a helpful option for first time buyers who can afford monthly repayments but haven’t been able to save a deposit. Just remember that starting with no equity means you may be more exposed if house prices fall.

‘Lenders will typically look beyond rental history when assessing affordability, including assessing your credit record, spending and how you might manage potential changes in interest rates.

'As with any mortgage product, it’s important to consider if the product aligns with your circumstances and to understand the potential risks involved.’

When you’re ready to see what’s available, browse our latest developments and find a new home that fits your budget and goals.

Disclaimer:

This article is for general informational purposes only and does not constitute mortgage advice. We would always recommend that advice is taken from a regulated mortgage adviser regarding your specific circumstances.