100 Percent Mortgage

100% No Longer Provided!
100% Mortgages are no longer available. Available options similar to this type of discontinued product are ‘Minimum 10% Deposit’ and ‘Shared Equity Mortgages’.

If you would like to inquire about either a minimum 10% or a shared equity mortgage click on the FREE QUOTE button.


Mortgage Indemnity Insurance For 100% Mortgages

If you are in the position of requiring a mortgage for at least 100%, then it is likely that the lender will require you to take out and pay for a mortgage indemnity policy. Despite the fact that the borrower normally bears the cost of this insurance policy, it works exclusively for the benefit of the lender.

The point at which the lender demands that a mortgage indemnity policy is taken out varies, but it is almost guaranteed that a lender will require an indemnity policy if you have a mortgage of more than 95% loan to value. Some lenders, however, will require that mortgage indemnity insurance is taken out if the loan to value is greater than 80%.

Quite simply, a mortgage indemnity policy is there to cover any losses that a lender may suffer if the borrower fails to keep up their mortgage payments and the house has to be sold; for example, if the property is sold for a price that is lower than the outstanding mortgage amount. Where there is a higher loan to value percentage, there is obviously a greater risk that this scenario could occur and, therefore, the requirement for a mortgage indemnity policy becomes much greater in these circumstances.

The insurer can come after the borrower...
Rather controversially, it is possible for the insurer to come after the borrower for any claims that are made on the insurance policy. This can potentially be pursued for up to twelve years after the event of default, creating a danger and risk to borrowers finding themselves in this position.

The cost of a mortgage indemnity policy is often around £1,000 and is either charged separately to the borrower or is hidden in higher rates for borrowers requiring this type of insurance policy.

Avoid additional cost...
A good way to avoid this additional cost is to borrow an amount just below the cut off point for the requirement level for a mortgage indemnity policy. For example, if the cut off point is 95% then take out a mortgage for 94.99%; this may mean a drop of less than £100 for a £1,000 saving.