Yes, it is possible to get what people call a “0% mortgage,” but it almost never means borrowing money with 0% interest. There are several situations that can be described this way:
1. A true 0% interest mortgage (extremely rare)
A genuine mortgage charging 0% interest is almost unheard of in the commercial market. It may occur in limited circumstances such as:
- A loan from a family member.
- An employer-assisted home purchase scheme.
- Certain religious financing arrangements that avoid charging interest (though they may use other pricing structures).
- Very limited government or charitable housing programs.
These are exceptions rather than standard mortgages.
2. A 0% deposit mortgage
Some lenders offer mortgages requiring no deposit, meaning you borrow 100% of the property’s value. These are sometimes mistakenly called “0% mortgages.”
However:
- They are available only to borrowers who meet strict affordability and credit requirements.
- Interest rates are usually higher than mortgages requiring a deposit.
- Monthly payments are larger because you’re borrowing more.
- If property prices fall, you could end up owing more than your home is worth (negative equity).
3. Interest-free introductory period
Unlike credit cards, mortgages generally do not offer promotional 0% interest periods. If a mortgage advertises a low introductory rate, it is usually a reduced interest rate—not zero.
4. Shared ownership or equity schemes
Some home-buying schemes allow you to purchase part of a property and pay rent on the remainder or receive an equity loan. While certain parts of these arrangements may initially have no interest, the mortgage itself still typically charges interest.
Why lenders don’t offer 0% interest mortgages
Mortgage lenders borrow money themselves and must cover:
- Their own funding costs.
- Operating expenses.
- Credit risk if borrowers default.
- Regulatory capital requirements.
- Profit.
Charging no interest would generally make lending unprofitable unless another party subsidized the loan.
If you’re trying to reduce mortgage costs
Instead of looking for a true 0% mortgage, you may benefit more from:
- Saving a larger deposit to qualify for lower interest rates.
- Improving your credit score before applying.
- Comparing fixed-rate and variable-rate mortgages.
- Choosing a shorter loan term if you can afford the higher monthly payments, as this reduces total interest paid.
Bottom line
A true 0% interest mortgage is extremely rare and is generally available only through special arrangements rather than mainstream lenders. If someone advertises a “0% mortgage,” they are usually referring to a mortgage with no deposit requirement, not one with zero interest.
