A new mortgage product has been launched aimed specifically at people who are currently renting. The deal, which lets buyers purchase a home with no deposit, requires house hunters to have a good credit history as well as a record of 12 months or more having paid their rent on time. Unlike many other no-deposit deals that are currently on the market, applicants do not need a guarantor.

Skipton Mortgages, are the first back to market in offering a 100% mortgage since the 2008 financial crash, however, other lenders are bound to follow suit in the next few weeks following the good publicity of helping first-time buyers who cannot save for a deposit. The deal has a 5-year fixed rate at 5.49% with no fees.

According to Skipton Building Society, “For too long, deposits have held back renters from becoming homeowners. With house prices and the cost of living rising, how can people be expected to pay their rent, keep up with bills and save five-figure sums for deposits? We think that needs to change. Which is why we’re putting our money where our mouth is with our brand-new Track Record mortgage – the first of its kind – where we look at a renter’s history of making rental payments, and if they meet affordability criteria they can access a mortgage without a deposit.”

Key eligibility criteria

  • Each applicant must be a First Time Buyer
  • Each applicant must be aged 21 or over
  • The same people who are renting now (and have been for the last 12 months) must be the same people on the mortgage
  • Must have proof of having paid rent for at least 12 months’ in a row, within the last 18 months
  • Must also have 12 months experience paying all household bills within the last 18 months
  • Each applicant will have no missed payments on debts / credit commitments in the last 6 months
  • The monthly mortgage payment must be equal to or lower than the average of the last 6 months rental cost
  • The deposit must be less than 5%
  • Maximum loan size £600,000
  • Not available on New Build flats

If you would like to discuss 100% mortgages, please contact Steve Padgham at The Financial Planning Group now via e-mail at Steve.Padgham@fpgonline.co.uk or by calling 020 8614 4782.

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