Saving for a deposit is often the biggest hurdle when buying a home. With rising house prices and the cost of living still putting pressure on household budgets, it’s no surprise that one of the questions we’re asked most is:
“Can I buy a new build home without my own deposit?”
The answer is… sometimes, yes.
While most mortgages require a deposit, there are situations where buyers may not need to use their own savings. Thanks to certain lender criteria and developer incentive schemes, buying a new build with little or even none of your own money towards the deposit could be possible.
Here’s what you need to know.
Do you normally need a deposit?
Traditionally, the answer is yes.
Most mortgage lenders require buyers to contribute a minimum of 5% of the property’s purchase price as a deposit.
- Property price: £300,000
- Typical 5% deposit: £15,000
- Mortgage required: £285,000
For example:
For many buyers, particularly first-time buyers, saving that £15,000 can take years.
However, new build homes can sometimes offer more flexibility.
Can a developer help with your deposit?
Yes.
Many housebuilders offer incentives to help buyers move into a new home. One of the most common is a deposit contribution, where the developer contributes towards the purchase.
This might be:
- A contribution towards your deposit
- A cash incentive
- A package of extras that reduce your upfront costs
Not every lender accepts every type of incentive, which is why it’s important to seek advice before reserving a property.
Is it possible to buy with no money towards the deposit?
In some circumstances, yes.
Certain lenders now allow the entire 5% deposit to be provided by the developer, rather than the buyer.
This means that, depending on the lender, the property and your individual circumstances, you may not need to contribute any of your own savings towards the deposit.
For example:
Purchase Price: £300,000
- Required deposit: £15,000 (5%)
- Developer contributes: £15,000
- Your contribution: £0
- Mortgage: £285,000
This won’t be suitable for everyone, and it isn’t available on every development, but it can be a fantastic opportunity for buyers who can comfortably afford the monthly mortgage payments but haven’t yet built up significant savings.
What lenders offer this?
Mortgage lending criteria changes regularly, and different lenders have different rules.
Some lenders are now willing to consider developer-funded deposits on eligible new build properties, subject to their lending criteria and affordability assessment.
Because criteria changes over time, it’s always worth speaking to a mortgage advisor who can identify which lenders may be suitable for your circumstances.
Do I still need to pass affordability checks?
Absolutely.
Even if you don’t need to provide your own deposit, lenders will still assess:
- Your income
- Your outgoings
- Your credit history
- Existing commitments
- Whether the mortgage is affordable for you
A developer contribution doesn’t replace the affordability checks, it simply helps reduce one of the biggest barriers to buying.
Are there any catches?
Like most mortgage products, there are a few things to be aware of.
Not every lender accepts developer-funded deposits.
Not every developer offers them.
Some developments may have limits on the incentives available.
You’ll also still need to budget for other buying costs, such as solicitor’s fees, searches and moving expenses.
The good news is that these are all things your mortgage advisor can explain before you commit to purchasing.
Who could benefit?
This type of mortgage could be particularly useful if you:
- Are a first-time buyer
- Have a good income but limited savings
- Have found your ideal new build home sooner than expected
- Want to get onto the property ladder without waiting years to save a larger deposit
Every buyer’s situation is different, which is why personalised advice is so important.
Frequently Asked Questions
Do I need any savings at all?
Possibly. While some buyers may not need to contribute towards the deposit, you’ll still need to budget for legal fees, moving costs and any other expenses associated with buying a home.
Can I use a gifted deposit instead?
Yes. Many lenders accept gifted deposits from close family members, although each lender has its own criteria.
Can I combine a gifted deposit with a developer contribution?
In some cases, yes. This will depend on the lender’s criteria and the overall incentive package being offered.
Is this available on every new build property?
No. It depends on both the developer and the lender involved.
Can existing homeowners use these schemes?
Potentially. While they’re often popular with first-time buyers, some options may also be available to home movers, depending on the circumstances.
The bottom line
Buying a new build home without using your own savings towards the deposit isn’t possible in every situation—but it is becoming a realistic option for more buyers than many people realise.
If you’ve dismissed buying a new build because you thought you needed thousands of pounds saved, it may be worth having a conversation first.
Every lender has different criteria, every developer offers different incentives, and what’s available to one buyer may not be available to another.
At Mortgage Select, we specialise in new build mortgages and work closely with buyers and developers every day. We’ll explain what’s possible, search the market for suitable options and guide you through the process from start to finish.
If you’re thinking about buying a new build, we’d be happy to help you explore your options.
