According to Moneyfacts there are now 6 lenders that offer 100% loans;
Aldemore – 5.48% fixed for two years or 5.68% fixed for three years, both with £299 booking fee and £999 completion fee; guarantor needed
Barclays (under Woolwich brand) – 2.99% fixed to 30 June 2019, fee-free; guarantor needed
Bath building society – 3.89% fixed for three years or 3.69% discounted variable rate for three years, both with a 0.4% arrangement fee; guarantor needed
Kent Reliance – 4.99% fixed for two years with £499 arrangement fee; for shared ownership properties
Tipton & Coseley building society – 3.19% discounted variable rate for term, fee-free; guarantor needed
Vernon building society – 3.40% discounted variable rate for four years, £199 arrangement fee; guarantor needed
This is the first time since the financial crisis took hold and includes the likes of Barclays but there are strings attached. For first time buyers they will need a guarantor. Family or friends of the borrower will have to deposit the equivalent of 10% of the property’s purchase price in a savings account and keep it there for three years.
They will receive the money back at the end of the three-year period with interest equivalent to the base rate plus 1.5%.
Brokers say that the return of a mainstream lender is notable. “The small building societies and challenger banks have been quite good in offering them for certain people, but to have a big lender coming in is a game-changer,” says Andrew Montlake of mortgage broker Coreco. “We’re seeing more first-time buyers struggling to even raise a 5% deposit without help. This will prompt them to look at whether they can get on the property ladder after all.”
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May 10, 2016