We Bought Our £242,000 Home Without a Deposit - Here's How
BBC News reports on the growing trend of low-deposit mortgages in the UK. Until recently, Conroy (32) and his partner Amber (28) struggled to save for a deposit, but they found a solution with the Track Record mortgage from Skipton Building Society. This type of mortgage covers 100% of the property value with no upfront payment required.
While Conroy and Amber are excited about their new four-bed home in Swinton, Manchester, they are also aware of the risks. They face higher interest rates (5.33%) for five years and the possibility of negative equity if house prices drop. To mitigate these risks, they plan to overpay their mortgage in the first five years to build up more equity.
This trend is not limited to Conroy and Amber. According to the Bank of England, low-deposit mortgages are at their highest since 2008. Lenders like Lloyds, Santander, Skipton, and Yorkshire Building Society have introduced new deals covering up to 100% of property value. These options aim to help first-time buyers cope with rising house prices and saving challenges but come with higher rates and other constraints.
Another successful low-deposit buyer is Bronya (27) and her partner George (29), who used a similar mortgage from Lloyds to purchase their four-bedroom home in Rhuddlan, North Wales. They paid a 98% loan-to-value with only £5,000 down and face an interest rate of 5.89% for the first five years.