Are 99% Mortgages Making a Comeback?
Saving a deposit is the single biggest barrier to buying a first home, so it is no surprise that "99% mortgages" grab headlines whenever they appear. They let you buy with a deposit of just 1%. But are they actually available, and are they a good idea? This guide explains how they work, who offers them, and when a slightly larger deposit is the smarter move.
At a glance
- What it is
- A mortgage for 99% of the price (1% deposit)
- Availability in 2026
- Niche, a handful of lenders
- The core market
- 5% deposit deals
- Watch for
- Higher rates, longer tie-ins, property rules
Key takeaways
- A 99% mortgage means a 1% deposit and borrowing the other 99%, known as 99% loan to value.
- They exist, but they are niche. A small number of lenders offer them; the mainstream low-deposit market is still built around 5% deposits.
- A government 1% deposit scheme was rumoured but never launched. The deals that exist are lenders' own products.
- They can be a lifeline when your affordability is strong but savings are the sticking point, but expect stricter checks and a higher rate.
What is a 99% mortgage?
A 99% mortgage is simply a mortgage at 99% loan to value. You put down a 1% deposit and borrow the rest. On a £200,000 home, that is a £2,000 deposit and a £198,000 loan.
Because you are borrowing almost the entire value, the lender is taking on more risk, and that shapes everything about these deals: the rates, the checks and the small print. To understand why the deposit size matters so much to the rate you are offered, see our guide to loan to value.
Are 99% mortgages available in 2026?
Yes, but only from a few lenders. Yorkshire Building Society has offered a 99% mortgage letting first-time buyers with as little as a £5,000 deposit buy a home worth up to £500,000, also available through its broker arm Accord. A handful of other niche deals come and go.
What did not happen was a formal government scheme. A 1% deposit scheme was rumoured but never materialised, so the products on the market are lenders' own, not a state-backed guarantee. For most first-time buyers, 5% deposit mortgages remain the core of the low-deposit market, with far more lender choice.
How do they work, and what are the catches?
The trade-off for a tiny deposit is stricter terms. Expect:
- Tougher affordability checks. At 97% to 99% loan to value, lenders look very closely at your income and outgoings.
- Property restrictions. New-build flats and unusual properties are often excluded.
- A higher interest rate. The less deposit you have, the more you pay, because the risk to the lender is greater.
- Longer tie-ins. Many low-deposit deals lock you into a five-year fix with early repayment charges.
Once your equity climbs above 10%, through overpaying or rising house prices, cheaper deals usually open up, so a 99% deal is often a starting point rather than a forever home.
Are they worth it?
It depends on your situation. A 99% mortgage can be genuinely useful when you can comfortably afford the monthly payments but cannot save a large deposit while paying rent. Getting on the ladder sooner can beat waiting years to save, especially if prices rise in the meantime.
The risks are real, though. Borrowing almost the full value leaves you exposed to negative equity if house prices fall, meaning you owe more than the home is worth. That matters most if you might need to sell or remortgage soon. Going in with your eyes open, and a stable income, is key.
The alternatives worth comparing
Before reaching for a 99% deal, it is worth weighing the alternatives:
- A 5% deposit mortgage, which usually offers more choice and a better rate.
- A gifted deposit from family, which lowers your loan to value.
- A joint borrower sole proprietor mortgage, where a family member's income helps you borrow without them owning the home.
- Shared ownership, buying a share and paying rent on the rest.
To see how much you would need to earn for the home you have in mind, try our salary to buy a house tool, and check how much you could borrow with the affordability calculator.
Frequently asked questions
What deposit do I need for a 99% mortgage? Just 1% of the purchase price, plus your other buying costs such as legal fees and, where it applies, stamp duty.
Are 99% mortgages a good idea? They can be if your affordability is strong but savings are the barrier. Weigh the higher rate and negative-equity risk against the benefit of buying sooner.
Is there a government 1% deposit scheme? No. It was rumoured but never launched. The 99% deals available are lenders' own products.
Thinking about a low-deposit purchase? Work out the income you would need with the salary to buy a house tool, and read how people afford houses for the routes buyers actually use.
