One hundred percent mortgages on the rise
Despite rocketing house prices, rising interest rates, and possible future rises in interest rates that are being predicted by financial experts, many people in the UK are still determined to get on to that property ladder no matter what the sacrifices. Recent reports indicated that more and more fist time buyers were relying on handouts and loans from their families in order to raise a deposit and get on the first rung of the property ladder. And now, recent data has indicated that a rising number of people are opting to take out one hundred percent mortgages, so that they can get onto the property ladder without having to try and raise the substantial amount that would be needed as a deposit.
The standard minimum deposit amount on mortgages in the UK is normally five percent of the property's value. However, with property prices in the UK rocketing out of control, this has made it impossible for many first time buyers to save up such as large sum without having to wait for years to purchase a property. In light of this, many are now deciding that a one hundred percent mortgage – usually available to first time buyers with good credit – is the way forward.
According to one mortgage broker: "As the proportion of people going to university has grown over the last few years, as indeed has the level of fees that they pay, we have seen a new generation of young people starting their working lives much later, often saddled with thousands of pounds worth of debt. Faced with the choice of either delaying a house purchase until the debt has been paid off and a new savings pot accumulated, or taking the plunge earlier with the aid of 100 per cent plus home loans, it is unsurprising that greater numbers have more recently chosen the latter."