House loan: 100% mortgages

If you’re looking for a house loan on a tight budget, you may be interested in a 100% loan. Here we answer some typical questions about this finance.

What is a 100% mortgage?
This is a house loan for the full purchase price of the property you want to buy.

Why should I take one on?
If you’re considering this option, it’s sometimes preferable to apply for it now, rather than waiting around until you’ve saved up a deposit.

What are the interest rates?
100% mortgages will tend to incur a higher interest rate than traditional mortgages.

Can I use extra funds?
You can sometimes include some extra borrowing to cover the solicitor’s fees, arrangement fees, as well as the consolidation of any existing debt.

How does the deposit work?
Unlike traditional mortgage applications, one of the points of a 100% mortgage is that there is no initial deposit. Instead the deposit comes from the mortgage lender. Your solicitor will arrange for the amount to be drawn down from the lender when they legally require it.

Is the mortgage kept for a fixed period?
In many agreements, there may be a stipulation that you have to maintain the mortgage for a minimum number of years. Alternatively, there are many 100% mortgage products on the market that include other options, such as fixed, tracker or variable rate deals.

Are mortgages available with bad credit?
It may be possible to obtain a 100% mortgage even if your credit rating is poor. Brokers will offer advice on this.