100% mortgages make a comeback: Three years after the crunch, bank lures buyers
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- Published on Tuesday, 06 September 2011 16:33
Mortgages that cover the entire cost of a home return this week. Three years after being scrapped in the credit crunch, a bank is bringing back the super-size loans that allow first-time buyers to get on the housing ladder without saving a penny.
Such 100 per cent mortgages were axed after lenders were criticised for making irresponsible loans – but the move caused major problems for young people who had relied on them to buy without having a deposit.
And it forced soaring numbers to rent at a time when the cost of tenancies has reached an all-time high.
Yesterday, however, a lender called Aldermore said it will become the first bank since 2008 to offer a ‘deposit-free’ deal.
Set up in 2009, the bank promises ‘a fresh perspective’ on mortgages. If successful, its pilot scheme launched this week could be copied by rivals.
But the offer comes with a significant catch. Buyers need generous parents ready to put their own home on the line to help their offspring.
For, if disaster strikes, and the home is repossessed, the guarantors also face losing the roof over their heads.
Source: dailymail.co.uk by Becky Barrow
