No deposit, no problem: the new 100% mortgages for first-time buyers
Summary
Several UK lenders are offering new mortgage deals that let first-time buyers borrow up to 100% of the property price, meaning they do not need a deposit. These deals often come with higher interest rates and different rules depending on the lender. Some loans also allow a family member or friend to help qualify for a bigger mortgage without owning the home.Key Facts
- Metro Bank launched a 100% mortgage for eligible first-time buyers with a five-year fixed rate of 6.99% and a maximum loan of £675,000.
- Lloyds offers a mortgage requiring a minimum deposit of £5,000 (just over 98% loan-to-value) with a rate of 5.89% for homes up to £300,000.
- Santander has a similar deal allowing borrowers to finance up to 98% of the home value, with a minimum deposit of £10,000 and a 5.49% rate, up to £500,000.
- Skipton and Yorkshire building societies offer mortgages up to 100% and 99% loan-to-value respectively, with rates around 5.55% to 6.44%.
- Joint Borrower, Sole Proprietor (JBSP) loans enable buyers to add a family member or friend to increase borrowing power without sharing ownership.
- JBSP loans mean all parties share legal responsibility for repayments, making these arrangements serious commitments.
- Higher loan-to-value mortgages typically have higher interest rates compared to loans requiring larger deposits.
- These mortgage options aim to help people enter the housing market despite rising property prices and affordability challenges.
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