What is 100% Mortgage?

A 100% mortgage is a type of mortgage which covers the total value of the property the mortgage is being used to purchase. For example you do not need to put any deposit down  – the mortgage lender provides a mortgage to cover the full property value.

Simply put, a 100 percent mortgage means that you have borrowed 100% of the value of the property you are buying. It is also called zero down mortgage, because you don’t have to put down any deposit. It is especially popular within the United Kingdom.

This type of mortgage is especially common with first-time buyers. High-percentage mortgages, like this one, are not as likely to be subjected to extra lending charges as they once were. At the moment there are few brokers that accept 100% mortgage applications.

Keep in mind that just like you need to shop around for the right property, you need to find the right mortgage for you. Right now 100% mortgages are available through several lendors, for example Aldermore.

Their terms are – young buyers can borrow up to 100 per cent of the property’s value, with a maximum loan of £250,000, without a deposit. But their parents have to guarantee up to 25 per cent of the property’s value by putting up the family home as collateral.

Step-parents, grandparents and legal guardians can also act as guarantors if they are ready to take the risk. First time buyers have to be aged over 25, earning more than £10,000 and with a clean credit history.

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