Help is at Hand With 100% Mortgage

by Mark Johnston

A few years back lenders were falling over themselves to provide home buyers with mortgages. Even those with the worst credit history were able to get on the property market with the smallest of deposits.The collapse of the sub-prime market and subsequent credit crunch saw many lenders close their doors, some for good. Others moved away from the risky sub-prime market and relied on less riskier borrowers to cover restore their balance sheets.

This has meant that many with good credit history have been priced out of the market because lenders are asking for high loan to value on the mortgages. This is a way of managing risk; borrowers have to put down up to 60% deposit to secure a mortgage so that lenders have a lot of equity in case of a loan default.

First time buyers and younger borrowers are finding it difficult to find large deposits, and those already on the market with little equity are struggling to remortgage.

Mortgagerates.org.uk are starting to see an increase in mortgages offered with smaller deposits and even a few that offer 100% loan to value for borrowers who already own their own home but are looking to re-mortgage.

A 100% mortgages is when homebuyers borrow the full value of the property they are looking to buy. Getting a 100% is difficult and can be subject to additional charges and higher interest rates. Some borrowers have been put off the market completely until they can save larger deposits so that they can get better interest rates.

NatWest are offering a 100% mortgage for existing borrowers but you do not have to be a customer of NatWest. The bank is offering the 100% mortgage on a 2 year fixed rate basis at 5.49% APR. The mortgage then reverts back to their standard variable rate which is currently 45 (4.4% APR).

For those looking for a longer term, NatWest also offer their 100% mortgage on a 5 year fixed basis for 6.09% which again reverts back to their standard variable rate. Both deals have a £199 booking fee and have early repayment charges.

Lloyds TSB have a 3 year fixed mortgage with a loan to value of 95% so borrowers only have to find a 5% deposit to buy the house of their dreams. The three year fixed mortgage comes at rate of 4.79% those wanting to apply must hold their current account with Lloyds TSB. After the initial term, the mortgage reverts back to their standard variable rate (SVR) which is currently 2.5%.

Finally, Ulster Bank is offering a 95% loan to value (LTV) mortgage at 3.45%. The Northern Ireland arm of NatWest is offering the mortgage as a 5 year discount mortgage which reverts to their standard variable rate (SVR) which is currently 4% after the 5 year term. The maximum that homebuyers can lend is £500,000 and it comes with an application fee of £295.



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