No Deposit Mortgages Are On Their Way Back
Prospective mortgage borrowers with no deposit to their name could soon have a new pathway to homeownership following confirmation that 100% mortgages are on the way back.
One UK lender has just announced that they are launching a no deposit mortgage product later this year, aimed at filling the void left behind when the Help to Buy scheme ends.
This zero deposit mortgage offering is set to become the only deal of its kind on the market, but the eligibility criteria and interest rates for it are yet to be announced. While deposit requirements are a barrier for many aspiring homeowners, affordability is an equally steep mountain to climb for some struggling families, and high rates might deter others.
In any case, the launch of a new 100% mortgage will increase the range of options for borrowers who are unable to make a down payment, but it’s important to keep in mind that it won’t be the only way to get onto the property ladder with no deposit, or a very limited deposit.
There are alternatives to consider. Firstly, those who have family support could look into guarantor mortgages, and it’s often possible to get a no deposit mortgage when buying a council or housing association property through the government’s Right to Buy scheme.
Then there are a range of low deposit mortgage options available. Although the Help to Buy deadline is on the horizon, some lenders still offer 95% mortgages under the right circumstances. Before putting all of your eggs into the ‘no deposit’ basket, it’s worth exploring whether you could get a better deal by hanging fire until you have a small deposit saved.
There are mortgage brokers who specialise in helping customers with little-to-no deposit get on the property ladder, and they can bring you up to speed with every possible option and make sure you choose the right one. Needless to say, when this new 100% mortgage product hits the market, seeking professional advice before you apply for it is highly recommended.