True cost to first time buyers choosing new 0% mortgage deposits

With each passing month, it seems harder and harder for any of us to get even a toe on the property ladder.

For millions of would-be homeowners, the prospect of saving £70,000 for a deposit is virtually impossible.

But perhaps there's an answer; a number of banks are now offering first-time buyers the opportunity to secure a property without putting down a single penny, such as Skipton Building Society's 0 per cent, no-guarantor 'Track Record' mortgage.

Everyone's a winner, right? Well, as with anything in this life, nothing comes for free. While you might save a bit of cash and time bypassing the deposit stage, these types of deals often come with higher interest rates and a greater risk when it comes to negative equity.

So the question is, should you save up or dive straight into the deep end with a 100 per cent mortgage?

Securing the best mortgage rate for your home can be a tedious task (Getty Stock Image)

Difference between 0 per cent mortgages and traditional options

According to Moneyfacts, the difference isn't just the deposit required, 'it’s the interest rates and fixed-term options borrowers are offered'.

Two-year fixed rates for higher LTV (loan-to-value) mortgages, (a 0-5% deposit mortgage) average around 5.3 per cent, while there's an interest rate of 4.3 per cent for borrowers able to put down a 40 per cent deposit.

Higher-LTV deals will push borrowers into longer fixed terms at higher rates, increasing long-term costs, while those with larger deposits can opt for more competitive two-or five-year fixes - and save money long term.

So we've had a look at the numbers to see exactly how much you could be looking at if you went for a 0 per cent deposit compared to the more traditional route.

Examples of mortgage rates for a £300,077 home

These calculations are based on the average house price in the UK (Halifax - as of Jan 2026) and have been adjusted to fit a 25-year mortgage, the average period of repayment in the UK, so are only a guide.

Let's get into it.

Scenario 1: 100 per cent LTV / 0 per cent deposit

• Loan: £300,077

• Five-year fixed rate: 5.49 per cent (Skipton Building Society)

• Monthly repayment: £1,841

• Total paid: £552,268

Scenario 2: 95 per cent LTV / 5 per cent deposit

• Loan: £285,073.15

• Five-year fixed rate: 5.3 per cent (Moneyfacts average)

• Monthly repayment: £1,717

• Total paid: £514,982

Getting on the property ladder in the first place is a task in itself (Getty Stock Image)

Scenario 3: 90 per cent LTV / 10 per cent deposit

• Loan: £270,069.30

• Five-year fixed rate: 5.1 per cent (Moneyfacts average)

• Monthly repayment: £1,594

• Total paid: £478,332

Scenario 4: 85 per cent LTV / 15 per cent deposit

• Loan: £255,065.45

• Five-year fixed rate: 4.91 per cent (Moneyfacts average)

• Monthly repayment: £1,477

• Total paid: £443,237

Scenario 5: 80 per cent LTV / 20 per cent deposit

• Loan: £240,061.60

• Five-year fixed rate: 4.91 per cent (Moneyfacts average)

• Monthly repayment: £1,391

• Total paid: £417,164

Scenario 6: 75 per cent LTV / 25 per cent deposit

• Loan: £225,057.75

• Five-year fixed rate: 4.91 per cent (Moneyfacts average)

• Monthly repayment: £1,304

• Total paid: £391,091

A 0% deposit may look attractive at first, but it'll cost you lots more in the long run (Getty Stock Image)

What is the takeaway?

A glance at the figures shows the stark difference in overall payments, and exactly how much you can save in saving longer for a larger deposit.

The 0 per cent deposit will result in you paying £552,268 over the 25 years (using the fixed rate provided), while a 25 per cent deposit will set you back £391,091 over the same period, saving you a hefty £161,177 in repayments.

According to Moneyfacts, high-LTV borrowers are 'also more likely to face longer fixed terms at higher rates, meaning total lifetime interest could be much higher'.

Paul Adams, Sales Director at Pepper Money, said to LADbible: "Zero-deposit mortgages can seem like a quick way onto the property ladder, especially for first-time buyers struggling to save. But the reality is these products come with higher interest rates, fewer lender options, and a far greater risk of financial strain if the market fluctuates.

"In contrast, a 10–25 percent deposit reduces monthly repayments, gives access to better mortgage deals, and provides a buffer against negative equity."

He also highlighted that patience in saving a deposit is a 'more sustainable path to homeownership'.