I want to buy a house but have no deposit: rent-to-own and low-deposit options (guide)

A missing deposit does not automatically rule out homeownership, but it does narrow which routes are realistic and which risks you need to manage. Rent-to-own contracts, shared equity programs, and low-deposit mortgages all work differently, especially across countries and local housing markets. The key is understanding how each pathway handles upfront costs, credit standards, and your long-term total price.

How rent-to-own works

Rent-to-own typically combines a rental agreement with an option (or obligation) to purchase later. Many structures include an option fee paid upfront and a rent premium where part of each payment may be credited toward the future purchase, depending on the contract. The purchase price may be fixed at the start or set by a future valuation, which changes your exposure to market swings.

A practical checkpoint is what happens if you do not buy: option fees and rent credits can be non-refundable, and maintenance responsibilities may be split differently than in a normal tenancy. Before signing, confirm who pays for repairs, how rent credits are calculated, the timeline to buy, and whether you can qualify for a mortgage by the end of the term.

Shared equity schemes and criteria

Shared equity models reduce the deposit and mortgage size by having a public body, nonprofit, or another partner take an equity stake in the home. In some countries this appears as shared ownership (buying a percentage and paying rent on the rest); in others it is an equity loan or co-investment repaid when you sell or refinance. Eligibility often depends on income caps, first-time buyer status, household composition, and the type of property.

The criteria matter because shared equity can affect resale flexibility and monthly costs. You may face rules about property location, property condition, or using approved local services (for example, specific conveyancers, lenders, or housing associations). Also clarify how you can increase your ownership share over time and how improvements affect the equity split.

Lender requirements and evaluations

For low-deposit mortgages, lenders usually focus on repayment capacity and risk controls: credit history, income stability, debt-to-income (or similar affordability ratios), and the property’s valuation. A smaller deposit generally means stricter underwriting or added costs such as mortgage insurance, guarantee fees, or higher interest rates, depending on the country and product.

Lenders also assess the reliability of your income (employment type, contract length, probation periods, self-employment history) and your financial buffers after closing. Even if a program allows a very small down payment, you may still need funds for closing costs, inspections, appraisals, taxes, and moving expenses.

Needed documents for affordability checks

Affordability checks usually require proof of identity, proof of address, income evidence, and a clear picture of ongoing commitments. Common documents include payslips or payroll statements, tax returns (or assessments), bank statements, and letters explaining variable income such as bonuses, overtime, or commissions.

Expect to provide evidence of debts (credit cards, personal loans, student loans), recurring obligations (childcare, alimony, support payments), and any existing housing costs. Self-employed applicants are often asked for additional business records, such as profit-and-loss statements and accountant-prepared accounts, because lenders want to see stable income over time.

How to compare ownership pathways

When you compare pathways, treat upfront cash as only one variable. Rent-to-own may lower the immediate barrier but can embed extra costs in option fees, rent premiums, and price-setting clauses; low-deposit mortgages may require mortgage insurance or higher rates; shared equity may reduce borrowing but constrain future flexibility. To compare fairly, estimate your total outlay across 3–5 years (rent or mortgage payments, fees, insurance, maintenance, and likely refinancing costs) and map the conditions that would end the pathway (missed payments, inability to get a mortgage, or needing to move).

Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.

A useful way to decide is to rank what you need most: lowest upfront cash, the fastest route to full ownership, or the most predictable monthly payments. Then stress-test each option against realistic scenarios: interest rates rising at renewal, income disruption, moving earlier than planned, or property values changing. The “right” pathway is usually the one that still works if life becomes slightly less convenient than expected.

If you have no deposit today, your strongest position comes from clarity: confirm the contract mechanics, understand the lender’s evaluation standards, and compare total costs rather than only the headline down payment. With that framework, you can choose a pathway that matches your timeline, risk tolerance, and the rules in your country or local market.