No deposit, no problem: the new 100% mortgages for first-time buyers
Banks and building societies have started relaxing affordability rules and becoming more creative with productsFor many first-time buyers, getting their foot on the property ladder
By The Guardian
Metro Bank has launched a new mortgage allowing eligible first-time buyers to borrow up to 100% of a property’s value, provided a close family member acts as a joint borrower to share liability for the debt. The product, known as a Joint Borrower Sole Proprietor (JBSP) mortgage, targets buyers struggling to accumulate a deposit and permits loans between 95% and 100% of the purchase price.
Unlike a standard joint mortgage, the family member does not gain ownership of the property but remains legally liable for payments if the primary borrower misses them or faces financial hardship. The deal is a five-year fixed-rate mortgage with an interest rate of 6.99% and a maximum loan amount of £675,000.
Applicants must have an immediate family member, such as a parent, grandparent, spouse, child or grandchild, sign on as the joint borrower, and that person must have their own earned income rather than relying solely on pension or benefits. The mortgage is not available on new-build properties or homes situated above commercial premises.
This move follows similar efforts by other lenders, including Lloyds, which introduced a deal in May requiring just a £5,000 deposit, and Santander, which offers a comparable option allowing borrowing up to 100% of a property’s value. Skipton Building Society and Yorkshire Building Society also offer products permitting borrowing up to 100% and 99% respectively, with Skipton’s deal targeting renters at a fixed rate starting from 5.55%.
100% mortgages were once common but largely disappeared after the 2008 financial crisis, though lenders have recently begun reintroducing them with stricter eligibility criteria and family guarantees.