Mortgage with no down payment: options and risks

A mortgage with no down payment is harder to obtain because the bank takes more risk. The standard is usually 10–20% of the property value. No‑down‑payment options are not standard and may exist only in specific situations, typically with extra collateral or support programmes.

For a quick comparison of instalments and total costs, use the Mortgage comparison calculator.

Before you start, review the basics: What a mortgage is and how it works and Mortgage down payment.

When a no‑down‑payment mortgage is possible

Most often when the bank accepts additional collateral or when a support programme is available. In practice this means stricter conditions and a deeper credit assessment.

Alternatives to a down payment

Common alternatives include:

• additional collateral on another property,
• an in‑kind contribution (for example land),
• funds from a support programme,
• a guarantor or co‑borrower.

Each option has its own limits and documentation requirements. The bank will require proof of collateral value and financial stability.

Costs and risks

No down payment usually means higher cost: higher margin, extra insurance and greater risk if property values fall. Compare total cost and APRC, not only the instalment. Helpful context: How APRC works — rules, limits and examples.

How to prepare

Practical steps:

• prepare full income documentation,
• gather collateral documents,
• calculate a realistic budget and transaction costs,
• compare offers and contract terms.

It is also worth calculating the instalment under higher‑cost scenarios: Mortgage instalment — how to calculate.

Common mistakes

Typical mistakes include having no emergency buffer, over‑optimistic income assumptions and underestimating transaction costs. With no down payment, risk is higher, so realistic planning is crucial.

Programmes and additional collateral

In practice, a no‑down‑payment mortgage is possible only when the bank considers the risk acceptable. This usually requires additional collateral or participation in a support programme. Always check the programme requirements and any extra costs.

Minimum requirements and documents

For no‑down‑payment loans, banks expect stronger documentation: stable income, account history, proof of collateral value and a realistic transaction budget. The better prepared your documents, the higher the chance of approval.

When it is better to wait

If you do not have a financial buffer or your income is unstable, it is safer to wait and build a down payment. It reduces cost and lowers risk over time.

Impact on creditworthiness and LTV

No down payment means a high LTV, which signals higher risk to the bank. In practice it can lower the maximum loan amount or increase the margin. Check how instalments and total cost change with different down‑payment levels.

Additional costs that may appear

With no down payment, extra collateral costs or insurance are more common. This raises total cost, so calculate the full cost, not only the initial instalment.

A fallback plan

If the bank declines a no‑down‑payment option, prepare a Plan B: build part of the down payment, seek family support or delay the purchase. A backup plan reduces pressure and improves negotiation power.

How banks assess risk

Banks look at LTV, income stability and other liabilities. With high LTV, any extra risk signal (irregular income, high living costs) can reduce approval chances.

Checklist before applying

Before meeting the bank, prepare a short checklist: recent income proof, confirmation of funds for transaction costs, property documents and a fallback plan. Good preparation speeds up the process and lowers the risk of rejection.

Credit history and reliability

Without a down payment, banks scrutinize credit history more closely. Late payments or many liabilities can lower approval chances, so it is worth improving your profile before applying.

What to calculate before deciding

Before choosing an offer, calculate total cost, the instalment under a worse scenario and the impact of extra costs on your budget. This quick test shows whether a no‑down‑payment option is truly safe.

Costs you still need to cover

Zero down payment does not mean zero cash needed. You still need funds for notary and register fees, transaction taxes, possible brokerage fees and insurance. These costs can amount to several percent of the property price, so include them in the initial budget.

How to improve approval chances

Banks look closely at stability and risk indicators. To increase chances:

• keep other debts low and avoid new credit applications,
• show stable, documented income,
• improve credit history by paying on time,
• consider a cheaper property or a co‑borrower if needed.

When it can make sense

A no‑down‑payment option can be reasonable if your income is very stable and you have enough savings to cover transaction costs and an emergency buffer. It is still worth comparing with a partial down payment to see whether the cost difference is acceptable.