LONDON, UK – (NewMediaWire) – June 5, 2023 – One of the UK’s leading independent finance brokers has welcomed the arrival of the market’s first 100% LTV since 2008. UK Property Finance has heralded the introduction of the no-deposit mortgage as a potential game changer, potentially giving hope to millions of first-time buyers who may otherwise have been priced entirely out of the market.
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For the first time in 15 years, individuals and joint applicants unable to meet the UK’s notoriously exorbitant mortgage deposit requirements may be able to take their first step onto the property ladder. Issued with similar terms, conditions, and eligibility requirements as a conventional home loan, this new no-deposit mortgage enables borrowers to cover 100% of their property purchase costs, with no arrangement fees or processing fees payable upfront.
A Potential Game-Changer for First-Time Buyers
“Millions of people up and down the country have been crying out for more accessible mortgage products for years, so it stands to reason that this new 100% LTV option could be a game changer. The amount of money banks have been expecting borrowers to come up with has been ludicrous how can the average earner amass 50,000+ in cash to hand over? It’s just not realistic, which is why we’re really optimistic about the potential for a no-deposit mortgage to help get a lot of people out of dead-end private rental cycles.” Alisha Jethwa, UK Property Finance
Recent years have seen UK mortgage deposit requirements hit record-breaking highs. Deposits as high as 80,000 in some areas such as London and the South East have made homeownership unattainable for many. With the aim of eliminating this financial hurdle, the new 100% LTV mortgage could hold huge appeal to a large, but also largely overlooked, segment of the population.
Eligibility for a no-deposit mortgage rests on the same basic criteria as a conventional home loan. The product is available exclusively to first time buyers, who must be aged 21 or over, have an unbroken history of at least 12 on-time rental payments, and have a clean credit report at the time of their application.
Maximum loan size values are capped in alignment with the applicant’s monthly rental payment. This means that if the applicant currently pays 1,000 per month to rent a home, they will be considered eligible for a maximum monthly mortgage repayment of 1,000.
Cautious Optimism
“Having campaigned for years to try and help mortgage prisoners locked in at hideous unaffordable rates, the specter of 100% mortgages returning leaves me with mixed feelings. The criteria of requiring a good rental track record to prove someone can make mortgage payments are sensible, and so I cautiously welcome it, done carefully, after advice, as an option for some.” – Martin Lewis, founder of MoneySavingExpert.com