Metro Bank Introduces 100% Mortgages for First-Time Buyers
Metro Bank has launched a new mortgage product allowing eligible first-time buyers to borrow up to 100% of a property's value with a family member as a joint borrower.
By The Guardian
Metro Bank has launched a new mortgage designed to help eligible first-time buyers purchase a home without a deposit, allowing them to borrow up to 100% of a property’s value if a close family member agrees to act as a joint borrower.
The product, known as a Joint Borrower Sole Proprietor (JBSP) mortgage, is aimed at buyers struggling to save for a deposit and offers loans between 95% and 100% of a property’s purchase price.
Unlike a traditional joint mortgage, the family member does not own a share of the property but is legally responsible for the mortgage if the main borrower is unable to keep up with repayments. The five-year fixed-rate mortgage has an interest rate of 6.99% and is available on loans of up to £675,000.
To qualify, applicants must have an immediate family member – such as a parent, grandparent, spouse, child or grandchild – willing to act as the joint borrower. That person must have earned income and cannot rely solely on pensions or benefits. The mortgage is not available for new-build homes or properties above commercial premises.
The launch follows similar initiatives by other lenders seeking to support first-time buyers. Lloyds introduced a mortgage in May requiring a £5,000 deposit, while Santander also offers products allowing eligible buyers to borrow up to 100% of a property’s value. Skipton Building Society and Yorkshire Building Society have also introduced high loan-to-value mortgages, with Skipton’s Track Record Mortgage offering up to 100% borrowing for eligible renters, with rates starting from 5.55%.
One hundred per cent mortgages were widely available before the 2008 financial crisis but largely disappeared as lenders tightened their lending criteria. More recently, several banks and building societies have begun bringing them back, although with stricter affordability checks and additional safeguards such as family support.