A 100% mortgage is returning to the UK market for the first time in over a decade, as April Mortgages launches a no-deposit home loan from tomorrow, reigniting debate over affordability, access and risk in the housing market.
The Dutch-owned lender’s new product offers a fixed interest rate starting at 5.99% over 10 or 15 years, and is available to first-time buyers and movers earning a household income of at least £24,000. Unlike existing products requiring rental history or parental collateral, this deal has no such restrictions, making it one of the first truly open-access 100% mortgages seen since the financial crisis.
April Mortgages said the longer fixed term would help reduce the risk of negative equity, which occurs when a property falls in value below the loan amount. Negative equity became a widespread issue during the 2008–09 crash, with nearly 900,000 homeowners affected by April 2009.
The lender, a UK subsidiary of Dutch asset manager DMFCO, entered the British mortgage market last year and recently made headlines by offering income multiples of up to seven times salary for higher earners. Borrowers on the new no-deposit mortgage, however, are capped at 4.49 times income.
A return to pre-crisis lending — or a lifeline for renters?
The product’s reappearance has sparked mixed reactions. Nick Mendes, from mortgage broker John Charcol, called the launch a “much-needed alternative” for renters locked out of the market despite a proven track record of affordability.
“This is a welcome move for financially responsible renters who’ve managed payments but can’t save for a deposit,” he said.
With the average UK home now priced at £268,319, even a 5% deposit equates to over £13,000 — a significant hurdle for many.
But James Daley, director of consumer group Fairer Finance, cautioned that removing deposit requirements could reintroduce the kind of risks that fuelled the last housing market collapse.
“People with no equity are more vulnerable to falling into negative equity and being trapped. Lending more money to fix a broken system just builds more risk into the economy.”
April Mortgages’ interest rates are above average. For comparison, Monmouthshire Building Society currently offers a five-year fixed rate of 4.75% to borrowers with a 5% deposit. However, April says it will automatically reduce the interest rate as borrowers pay off their loans or as their properties increase in value, moving them into lower loan-to-value (LTV) bands.
Government support for lending innovation
The launch comes as the Treasury continues to encourage lenders to be more flexible, and most high street banks have recently lowered their mortgage stress-testing rates, potentially increasing affordability for many borrowers.
At the Building Societies Association annual conference last week, Emad Aladhal from the Financial Conduct Authority (FCA) said the regulator supported a mortgage market that works for all “borrowers who can afford to repay — including those who currently find it less accessible than they should”.
Still, many believe the fundamental issue lies in supply, not finance. Daley concluded: “We need to build more homes. Simply lending more money without fixing supply risks repeating the same mistakes we made before 2008.”
As one of the boldest mortgage offerings in years, April Mortgages’ new product may open doors for some — but it also raises important questions about long-term affordability, market resilience, and how the UK chooses to support homeownership in 2025.
