A new no deposit mortgage has come on the market and is the target on keyworkers and first buyers.
The 100% offers from Gable Mortgages include two five-year-old zero-deposit products with fixed rate-de one a standard option, the other for new-build homes.
It will only be a few days after April announced that it was one No Deposito Mharping For first buyers and movers.
The new mortgage of April, which caused as a rudder when it was launched last week, comes as a fixed tar love of 10 years or 15 years.
Now hot on his heels, Gable Mortgages has launched 100% deal to help those people who have traditionally been priced from the real estate market.
The mortgage comes with a rate of 5.95%, which brokers have described as high. It cannot be portrayed, so if borrowers move the house, they pay early reimbursement costs.
The arrival on the market is carefully welcomed and has led to speculation about whether more money lenders will launch 100% mortgages and, if so, whoever can be the next.
No Deposito Hypotheken have advantages and disadvantages. Although they overcome some of the affordable beliefs for the first buyer-rather the battle for building a down payment, they are also risky. Without a down payment, there is more chance of falling into a negative equity.
The large lesson that was learned from the financial crisis in 2008 was that the deposit -free mortgages were harmful to some borrowers. As such, strict rules were introduced to prevent irresponsible loans in the future.
This meant that 100% deals became rare, but lenders have taken provisional and responsible steps to reach this market with on guarantee-based deals and innovative offers such as such as such as such as such as Skipton Building Society’s Track Record Mortgage.
Just like April’s, the range of Gable goes a step further.
Emma Jones, director of Whoushebankenno.co.ukSpeaking through newspaper agency, worried. She said: “This is good news for borrowers, but again, the question must be asked: are we running the risk of reviving the last financial crisis?
“I know that the government is pushing more risky loans, but what about compulsory security policy to go next to these mortgages to ensure that homeowners have protection to cover the unplanned?”
Other brokers were more positive, but explained that everyone who was interested in applying for these mortgages should ask for advice.
Kylie-Ann Martin, director at Kag FinancialAlso said via Newpsage: “I really believe that there is a place for 100% mortgages, if they are regulated correctly.
“They will never be suitable for everyone, but these lenders do not want a huge part of the market, they want those customers who really fit with these niche products that we see.
“Those trapped in their rental homes with high editions and little room to save for that down payment.
“We speak with many people who pay huge amounts of rent who would see a significant cost reduction when comparing this with a mortgage – so for some I think it’s fantastic that more lenders offer these customers the chance to become homeowners.”
Will more money lenders release 100% mortgages?
Gable-Hypotheken and April mortgages have placed their heads above the parapet, but this raises the question of following other more well-known mortgage lenders?
Nicholas Mendes, MortGage Technical Manager at John Charcol, said: “With both Gable and April who are now entering this space, there is every chance that other lenders will follow.
“Increased competition can lead to better prices, more innovation and a broader range of options for first buyers.
“The question is clear, and because lenders compete more aggressively at the entry level of the market, it is likely that we will see more low or no supply of deposits appear in the coming months.
“Although these products will not solve the wider home crisis, they are a crucial step in opening access to homeowners for tenants who have been locked up for too long.”