100 Percent Mortgages

100 Percent Mortgage

Information on 100 percent mortgages, background, pros, cons and lenders.

100 Percent Mortgage Overview

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100 Percent Mortgages


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.

100% No Longer Provided!


The last mainstream UK mortgage provider offering a 100% mortgage withdrew their mortgage product in April 2008. What follows describes the situation before the problems associated with the credit crunch erupted.

Unsurprisingly, 100% mortgages have become increasingly popular in recent years with more and more first time buyers having to borrow the entire value of their property from mortgage lenders.

Property prices have continued to rise at a rate which far outstrips income rises, meaning that people need to borrow more and more cash in order to finance their property purchases.

First time buyers, in particular, are being stretched and are less likely to be able to save the previously standard 10% deposit. Average first-time buyer house prices reached £145,801 at the beginning of 2007, which means that buyers now need to find a deposit of nearly £15,000 if they are to obtain a mortgage of 90% loan to value. With rental costs also escalating, the opportunity to save is simply becoming less and less realistic, while the requirement to consider a 100% mortgage is becoming more critical.

100% Mortgage Providers



Mortgage lenders were quick to ensure that they offered first-time buyers this new facility in a bid to encourage more customers to borrow from them. London & Country mortgage brokers estimated that the number of people taking out a 100% mortgage has nearly doubled in the last year, showing that this sector of the mortgage market is more than buoyant.

100% mortgages are now readily available, with all of the major high street lenders offering a range of 100% mortgages from long-term fixed to fully variable rate. It is estimated that there are now 155 different 100% mortgages on offer, showing that there is a wealth of options available to buyers looking at this type of borrowing. Predominately, these mortgages are aimed at first-time buyers who simply have not had the opportunity to raise the necessary deposits. Increasingly, however, mortgage lenders are now offering these mortgages to other buyers, even within the buy to let market, although these are much less readily available and often carry much greater higher lending charges.

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Typical Interest Payments

First Time Buyers

2.89%

Purchased Fixed

2.89%

Discounted Rate

2.99%

Buy To Let

2.99%

Commercial

3%

 

 

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