100% mortgage

100% mortgages enable you to raise funds against the full worth of the property; they are mortgages that require no deposit.

A mortgage lender will normally consider a 100% mortgage to be more of a risk, so typically will charge higher rates of interest and often require you to pay a mortgage indemnity premium.

Usually with 100% mortgages, the applicant will need to have a good credit profile, however some lenders offer 100% mortgages to applicants with a poor credit history.

Apart from 100% mortgages usually having higher rates of interest, there is also a risk to the mortgage lender of negative equity. If house prices drop soon after the property is purchased, then there is no equity within the property value, which leaves the lender in a position where they can make a loss. If you need to sell, or if you stop paying off the 100% mortgage and the mortgage company force a sale, then the current market value would be less than the loan.

100% mortgages can come in many different forms including discounted, fixed, capped and variable rate options.

Need more help or advice?
Barket Financial Management will guide and help you find the best products and services to suit your requirements and circumstances. To discuss your options in more detail, please call one of our friendly team on +44 (0)1582 482333 or complete an online enquiry here.