How to Get a Mortgage Without a Down Payment?

Not everyone has the financial means to make a down payment when buying a property. Between the down payment, notary fees, and other additional costs, it can be challenging to gather the necessary funds. Fortunately, there are several ways to obtain a mortgage without needing to provide your own contribution. Here’s how you can borrow without a down payment.

1. Mortgage Loans for First-Time Buyers

For people buying a property for the first time, there are specific options to obtain a loan without a down payment. Young people under 30 often face difficulties in securing a loan that covers the full price of a property, but Belgian law allows banks to offer more favorable terms for first-time buyers. This enables them to borrow more than the typical 80% or 90% of the property’s value.

In some cases, 35% of first-time buyers can borrow more than 90% of the property price, and 5% can even borrow 100% of the purchase price. So, if you’re a first-time buyer, it is possible to secure a mortgage without a down payment, giving you the opportunity to buy your first home without needing a large sum of savings.

2. The Family Loan: Support from Parents

Since September 2020, another option has emerged: the family loan. This innovative solution is similar to a personal loan but with more favorable conditions. Parents can lend between €3,000 and €50,000 to their children. This amount can be used to cover the down payment and notary fees.

The family loan not only provides financial support to young buyers but can also be more advantageous than traditional bank loans. This makes it an attractive option for those without a down payment but who can rely on family support.

3. A Mortgage with Two Properties as Collateral

Another way to obtain a mortgage without a down payment is by using two properties as collateral. Some lenders allow the borrower to use a second property as security for the loan. For instance, close friends or family can offer their home as collateral for your mortgage.

In this case, the borrower can borrow up to 90% of the combined value of both properties used as collateral. This allows for the full financing of the property’s purchase price without requiring a down payment. However, banks may impose stricter conditions for accepting this solution, so it’s essential to discuss these options with your lender.

4. Social Mortgages Without a Down Payment

Finally, there are social mortgages that can be granted without a down payment, depending on your situation. These loans are available to people who meet certain criteria for social housing and can cover up to 100% of the property price, or even 125% to cover both the purchase and notary fees.

To qualify for a social mortgage, you must meet specific eligibility requirements. It’s recommended to contact your local social housing agency to check if you qualify for this type of loan.

Conclusion

There are several ways to obtain a mortgage without having to make a down payment. Whether you are a first-time buyer, receiving family support, using a second mortgage, or eligible for a social loan, there are many options available. It’s important to understand the conditions of each option and consult with a financial advisor or your bank to determine the best choice for your situation.