Current 100-125% Mortgage Deals
February 19th, 2008 | by admin |With UK House prices predicted to fall or at least stagnate a 100% mortgage has some obvious disadvantages. With no deposit, it means that any fall in house prices will cause the homeowner to end up owning more to the bank than the house is worth. 100% mortgages are usually best during a period of rising house prices. This gives the chance for the LTV of the mortgage to decrease. However, at the moment this is unlikely to occur.
Another problem of the mortgage market is that many banks are reluctant to lend unconventional mortgages because there have been many mortgage defaults leading to a shortage of global capital. However some British Banks and Building societies are still willing to lend 100% - 125% of the house value.
Abbey National offer 2 products, one 100% mortgage and one which can lend upto 125% of the mortgage
100% Abbey Mortgage
This requires no deposit. THe 100% mortgage is available in a range of fixed or variable tracker rates. Allows a degree of flexibility, it is possible to pay back an extra 10% per annum. Booking fee can be added to the cost of the mortgage
125% Abbey Mortgage
This is called the 100% Plus. It allows a maximum of 125% loan to be made. The extra borrowing can be used for anything.
How much can I borrow for a 125% mortgage. According to the Abbey mortgage calculator, a salary of £40,000 would enable a mortgage loan of £172,000. This works out at over 4 times income multiple.
link Abbey
Other Mortgage Lenders who have offered 125% mortgages have included:
- Northern Rock
- Coventry Building Society
- Alliance and Leicester
- Accord