Metro Bank has announced a new mortgage initiative that enables first-time buyers to secure a 100% loan without requiring a deposit. However, the applicants must have a guarantor, typically a parent, to back the mortgage. This condition is designed to mitigate the lender's risk. The scheme is open to first-time buyers who meet the standard credit requirements, but the guarantor must be willing to assume responsibility for the mortgage repayments should the borrower default.
According to the Bank's data, over 300,000 first-time buyers have been priced out of the market due to the rising costs of deposits. By removing the deposit requirement, the new scheme aims to increase homeownership rates and make the property market more accessible to a wider audience.
However, critics have raised concerns about the potential impact of this move on the broader housing market. Some experts warn that it may lead to a rise in repossessions if borrowers struggle to keep up with repayments, while others argue that it will drive up house prices, making it even harder for first-time buyers to enter the market.
Average UK house prices have continued to rise, with the UK's largest property websites, Zoopla and Rightmove, reporting a year-on-year increase of 10% in the first quarter of 2026. The average UK house price now stands at £340,000, according to data from these property portals. For first-time buyers, securing a mortgage can be a significant hurdle, and schemes like Metro Bank's may provide some relief, though the reliance on guarantors adds a layer of complexity.
Metro Bank has stated that the 100% mortgage scheme is designed to provide an alternative to traditional mortgage options, but it is not a replacement for the Help to Buy scheme, which has been a popular initiative for first-time buyers in the past. The government has been reviewing the Help to Buy scheme, which is currently set to expire, and a replacement scheme is expected to be announced in the near future.
In the meantime, Metro Bank's 100% mortgage scheme may provide a lifeline for first-time buyers who are struggling to enter the market. However, it is essential for applicants to carefully consider the terms and conditions of the loan and the implications for their financial situation before proceeding.