100% MORTGAGES ARE BACK, AND BUYERS ARE TAKING THEM
Average first-time buyer deposit is around 20%. These borrowers put down nothing, or £5,000, and pay for it in the rate instead.
🔴 A four-bed house for £242,000, bought with a deposit of exactly nothing.
BBC Business reports that the share of UK mortgages with deposits worth less than 10% of a property's value is now the highest it has been since 2008.
The average first-time buyer deposit is around 20%.
Conroy, 32, a video editor, and Amber, 28, a solicitor, were renting in central Manchester and could not save. They used Skipton Building Society's Track Record mortgage, which covers 100% of the property value with nothing upfront.
The trade-off is the rate: 5.33% fixed for five years, £1,500 a month over 25 years. Roughly what their rent was. They plan to overpay for five years to build equity.
In Rhuddlan, North Wales, Bronya, 27, and George, 29, borrowed £258,000 from Lloyds, about 98% of the value, with a £5,000 deposit. Their rate is 5.89% fixed for five years, £1,400 a month over 33 years. They kept their savings back for a renovation costing upwards of £20,000.
Lloyds, Santander, Skipton and Yorkshire Building Society have all launched deals covering 95% or more of property value in recent years.
The risk both couples name is negative equity, when the property is worth less than the loan left on it.
David Hollingworth of L&C Mortgages told the BBC today's deals carry much stronger affordability checks than the pre-2008 era. Skipton borrowers must prove 12 consecutive months of rent payments and six months of credit payments.
Would you buy with no deposit if the monthly payment matched your rent?
#mortgages #firsttimebuyer #ukhousing #property #causeanuproar
First reported by
BBC Business
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