Firstly, let's have a look what a 100% mortgage is. A 100% mortgage is when you borrow the entire value of the home you want to buy. You will be aware that most mortgages require you to put down at least a 5% deposit. However, a 100% mortgage means that you do not need to pay deposit to get a home subject to affordability limitations.
In order to pass affordability checks, you will need to meet the following requirements:-
1. You are a first time buyer aged 21 or above;
2. You have a good rental track - i.e. You are able to provide proof of having paid at least 12months' rent in a row in the UK, within the last 18 months (for example 12 months bank statements);
3. You are not intending to purchase a property in Northern Ireland;
4. You are not intending to purchase a new build flat;
5. You have less than a 5% deposit;
6. You have no missed payments on debts/credit commitments over the last six months, at the very least;
7. You intend to borrow up to £600,000.
If you are able to pass the above criteria, you might still wish to consider some disadvantages of such a mortgage offer. The mortgage rate is set with an interest rate of 5.49% (at the time of writing) and fixed for 5 years, which could be proved to be more expensive to compare to other mortgages available on the market. So there is a potential that the 100% mortgage can result in the risk of negative equity (this is where the value of the loan is more than the property) due to no deposit requirement.
Albeit, the 100% mortgage provides for people who are trapped in renting and able to provide a strong history of making rental payments over a period of time.
You might wish to use the following link for full details:-
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