100% mortgages

Answered on 2 February 2019 by Nick Morrey


Is there still a 100% mortgage?


100% Mortgage Option

Unless you are buying on one of the government home buyer initiatives there are no 100% mortgage available any more. The minimum deposit you will need is 5% and then depending on the scheme you are on your parent's may also have to put down savings of 20% or accept a charge being secured on their own home.

The current economic climate has led lenders to restrict how much they will lend against value and we are only just beginning to see more of them launch 90% LTV products.

It may well be possible to change your current mortgage to a buy-to-let. Whether you can do this with your existing lender will depend on if they offer buy-to-let mortgages, it is very possible you will have to consider remortgaging to a new lender.

Deposits

Depending on how much equity you have in your existing property it may well be possible to raise the deposit for your new residential property on this. Buy-to-let mortgages are available up to 75% LTV with one lender offering 80%. Whether or not you are able to get one will depend in the main on the suitability of your property for letting and the anticipated rental income you can expect. Expect the rent, based on a 6 month Assured Shorthold Tenancy, to have to cover 125% of the monthly mortgage payment.

Guarantors are usually used where the applicant can not afford the mortgage they require, rather than making up for a lack of deposit. It can be possible to arrange a mortgage based on your salary alone and so it is only the deposit that is of concern.

I believe you would benefit from speaking to one of our independent mortgage advisers. Please call on 0344 346 3672 and one of our consultants should be able to advise you accordingly.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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