Tenants. You Can Now Buy a Home with a 100% Mortgage and 0% Deposit.
Skipton Building Society is getting ready to launch a mortgage targeting those “trapped in rental cycles” and who do not have access to “the bank of mum and dad,” and so are therefore unable to save up enough for a home deposit, the first 100% mortgage offering since the 2008 financial crisis. Read on...
Skipton Building Society have confirmed that it is launching a deposit-free mortgage specifically aimed at people currently renting.
The product, available at a borrowing rate of 5.49%, is likely to prove popular as the deal requires 12 months of on-time rental payments and a good credit history, but not a guarantor – unlike other similar deals. The UK’s fourth biggest building society, says it recognised a “gap in the market”.
Daren Cope, co-owner of Professional Properties said "Personally, I think it's a great idea. As long as the offering does recognise an excellent history of rental payments and bills over a period of time, the idea is definitely what the property market requires to help renters onto the property ladder. Rents have increased dramatically and are very often more than a comparable mortgage payment for a similar property and many tenants are already paying high monthly rental payments. I hope other lenders follow suit."
So, if you are a tenant who feels that you are stuck in the ‘Renters Cycle’? There are so many people have experienced the drastic increase of rental prices over the last 18 months.
The statistics on rent increases speak for themselves so this is potentially great news for many tenants.
Let's look at the detail
The UK's fourth biggest lender is offering a 100% mortgage loan option. Yes, that’s correct, 100% mortgage and 0% deposit needed!
Check the list below and see if you meet the criteria:
- A Track record of paying bills and rent on time.
- Renting a property at least 12 months out of the last 18 months.
- Mortgage payment must be equal or lower than the average rent for the last 6 months.
- Maximum mortgage terms is 35 years.
- Mortgages available between £5,000 and £600,000 only.
Currently, this product is the only product of its kind on the market. If it proves a success, then maybe other lenders will follow the lead and provide some healthy competition.