Not since the sub-prime taboo days of 2008 has a 100% mortgage been offered by a lender.

Since then, the closest the market’s come to it are the two 95% Help to Buy mortgage schemes, and one of them ends in December this year.

That’s why the news that the first 100% mortgage in eight years has arrived on the market, comes as good news. But will it help the right people? And is it truly a ‘100%’ mortgage?

Well, there is a catch.

Whilst the buyers themselves may not need a deposit, a ‘helper’ of the buyer must put 10% of the purchase price into a savings account with that particular lender.

So this isn’t a 100% mortgage, it’s a 90% mortgage?
It may sound like that, but, no. Whilst the ‘helper’ will have to put the funds down, providing all of your mortgage payments are up-to-date, they will get these funds back with interest added on top after three years.

Why would the lender do this?
It helps everyone. The lender gets new mortgage customers, the buyers get their home and the ‘helpers’ receive interest on, what is effectively, a savings account.

However, on the not-so-good flipside, access to a 100% mortgage could also be seen as a lender’s ‘wager’ that house prices will increase by 10% within the next few years, as they are essentially guaranteeing that there will be enough equity in the property within three years to pay the ‘helpers’ back.

So, if your parents, or someone you’re close with, has any spare cash laying around, this could help you get onto the property ladder quicker than expected.

If you don’t have that luxury, this scheme could see yet another flood of buyers that could drive house prices up even further – putting that step onto the ladder even further out of reach.

Because of this dilemma, it is imperative that you speak to a professional mortgage adviser who will be able to assist you in finding a mortgage that is right for your needs and circumstances.

Contact us
Nigel Glossop is from Alexander James Mortgage Services – for further information, call 0333 6000 008 or visit www.ajms.co.uk.

Your home may be repossessed if you do not keep up repayments on your mortgage.

There will be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1.5%, but a typical fee is 0.3% of the amount borrowed.

Correct at time of publication. The views and opinions expressed herein are those of the individual contributor and do not necessarily reflect those of the Chancellors Group of Estate Agents Ltd or its subsidiaries. References to legislation, best practice and other matters with legal implications such as fees, rules and processes are included for information and editorial purposes only and are not authoritative, nor should they be interpreted as advice. When in doubt you should only take advice from an industry professional or solicitor where appropriate. E&OE.