Exciting news for first-time homebuyers as 100% mortgages are back!
Skipton Building Society has announced a new mortgage product that allows renters to borrow up to 100% of the value of a property without a guarantor or deposit.
This means no upfront costs for buyers, which can be a huge barrier for many looking to get onto the property ladder.
The mortgage product has a fixed rate of 5.49% for five years, with a maximum term of 35 years.
This is the first time a mortgage lender has offered a 100% mortgage product since the financial crisis of 2008.
This could be a game changer for those who have been struggling to save due to increased rental costs. Skipton has described the move as “a lifeline to tenants ... to help them break out of their trapped rental cycles and onto the property ladder for the first time.”
The details:
- A 100% mortgage helps those struggling to raise enough cash for a deposit to get on the property ladder.
- These allow buyers to purchase a home without paying a deposit - but they can come with extra fees.
- This differs from most standard mortgages which require the borrower to put down at least a 5% deposit.
- Previously borrowers could only choose from a handful of niche 100% loan-to-value guarantor or family deposit mortgages - where another person agrees to guarantee your mortgage repayments if you can't repay what you owe, or deposits a set amount of cash in a designated savings account to cover some of the home's value.
- For a 100% deposit it's understood borrowers will need to demonstrate a history of paying rent comparable to mortgage repayments for up to two years.
For mortgage advice or more information, talk to the team at Broadland Consultants.