The Return of the 100% Mortgage

Skipton Building Society has launched a 100% mortgage to help renters get onto the property ladder without a deposit. The mortgage has a five-year fixed rate at 5.49% and a maximum term of 35 years. It is open to all first-time buyers who currently rent a property and pass the lender's affordability criteria. Applicants must be able to show a favourable credit score, and a minimum 12-month good rental history. The idea is to help get more people trapped in a rental cycle into home ownership.

Although it may feel like we are going back in time, conjuring images of the global financial crisis in 2008, we are now in a much better economic and regulatory environment. There are, of course, concerns that not having a deposit could result in negative equity, but this is why Skipton say they have positioned this as a longer term product, weighing the risks against the chance to help tackle the UK’s housing affordability crisis.

This mortgage product recognises that first time buyers, who have met their rent and household bills over a sustained period of time, have therefore demonstrated their ability to meet a mortgage payment lower than their rent, irrespective of the existence of a deposit. This is a significant difference to existing products which allow applicants to borrow up to 100% of the vale of a property, but require a guarantor as security.

In terms of whether you should go for a 100% mortgage, once you know you can comfortably afford the repayments, you need to think about your individual circumstances and whether house prices will rise or stagnate - this is a good time to talk through your goals with a mortgage adviser, so that you can review all your options and position yourself for success. However, as some people are paying out so much in rent that saving is impossible, the 100% mortgage is a welcome option to finally get on the property ladder.

If you would like to speak to us about your mortgage we would be happy to do so. You can either speak to your adviser directly or contact us by telephone or our website.

Your home may be repossessed if you do not keep up repayments on your mortgage.