100% mortgage?

hi, we went to see a mortgageadvisor today about a 100% mortgage interest only and was looking at fixed rate (but found tracker to be better) but he said companys were stopping lending 100% mortgages now due to this northen rock thing partly. and Nat west were stopping from tomoro, he showed us an email saying this but it says nothing on their website or anything.

please advise as we would need to sign papers tomoro if this is the case!


does this sound accurate.


just to add, we are currently renting and paying a lot of money a month for somebody elses mortgage which is why we were going to start with interest only just to get on property ladder. i understand repayments would be better. we spoke to an indepent mortgage broker within an estate agent.

thankyou for everyone who takes the time to answer.

8 Answers

  • 1 decade ago
    Best Answer

    There are still a few lenders out there that will lend 100% of the purchase price but they are being more selective over who they lend to. You will need to have a good credit record and sufficient income.

    You should speak to an Independent Mortgage/Financial Adviser who looks at the whole of the market. You can find these via www.unbiased.co.uk or some of the estate agency based advisers are independent (not all).

    Interest Only is still available but you should consider how you intend to repay the mortgage at the end of the term as the lender will need to know your plans. You may wish to just do interest only for the first couple of years whilst getting a foot on the ladder and then switch across to repayment so that the mortgage is guaranteed to be repaid.

    One big downfall of the Natwest 100% mortgage is that they will charge you a Higher Lending Charge. This charge is made for the lender to take an insurance policy to cover them in the event of you defaulkting on the mortgage. They do this as the risk to the lender is high and they may not get all the money back in the event of repossession. This insurance policy has no benefit to you though as should you default on the mortgage the insurer may still seek compensation and repayment from you. The lender may agree that you can add the Higher Lending Charge to your mortgage, although this means that you will pay interest on it. For NatWest, the Higher Lending Charge rate is 10.3% for loans over 95%.

    If you need any more help just send me an email and good luck!

    Source(s): 10yrs + as a qualified independent financial adviser
  • Anonymous
    1 decade ago

    An indepedent broker within an estate agent doesn't sound very likely...

    100% mortgages are disappearing rapidly.

    I'd be very surprised if anyone would get a 100% interest only anymore... that just like saying you can't afford the house

    A safer way to get on the ladder would be to investigate shared/ co-ownership - not only for key workers these days.

    Or finder a starter deal... I had a mortgage that was interest only for the first three years and then converted to a repayment mortgage. My bank knew my earnings would be increasingly rapidly so were happy to do so.

    For example; http://www.hsbc.co.uk/1/2/personal/mortgages/ways-... ... but a few years ago this deal was available at 100% rather than 90 or 95 % .. a couple might still exist out there

  • 1 decade ago

    Some lenders have stopped lending 100% mortgages. its because of the sub prime disaster in America as much as the Northern Rock debacle.

    With an interest only mortgage you would still need to have some sort of endowment policy which would pay off the amount of money you have borrowed at the end of the mortgage term.

    You should speak to someone who is not affiliated with a specific bank, i'd suggest an IFA (independent financial advisor) who deals with the 'whole of market'. they'll be able to get you the best deal for you.

  • Anonymous
    1 decade ago

    I can tell you for a fact that the Cheltenham & Gloucester do 100% mortgages. If you are a professional then Scottish Widows bank also do 100% mortgages. Shop around and do not sign anything until you are sure you want to proceed. Ensure that you take advice from an independent financial adviser or mortgage broker.

    Source(s): Work in finance and mortgages
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  • 1 decade ago

    personally i wouldnt bother with an interest only. That is a new name for an endowment which means your just left with a huge balance at the end and your not paying any of the balance off.

    Go for repayment if you can be that fixed or tracker. If you can afford to wait try and save a deposit and forget about 100% mortgage. If you cant do that proceed with caution and get a repayment NOT interest only!

  • 1 decade ago

    Yes that is right, I am surprised that Nat still had a product like that out there..and even if it is only pulled tomorrow...and you have signed ....it does not mean a thing..its up to these banks......once you sign the papers the banks hold the right to withdraw any product at any time unfortunately....start raising a deposit....things are only set to get worse in the credit and financial sector..pple have their heads in the sand at the moment...you will have a chance to snap up a repo or cheap property soon...good luck..

    Source(s): professional economist
  • Anonymous
    1 decade ago

    Royal Bank of Scotland / Natwest withdrew their 100% mortgage deal on tuesday 26th Feb.2008

    Other lenders are still offering them ie Bristol & West 5year fixed at 6.29% (no higher lending fee )

    Source(s): Mortgage Brokerage- Mortgage Broker for 20 years
  • dubie
    Lv 4
    1 decade ago

    Yes it sounds accurate. I read yesterday that UK banks were now asking for proof of payment of a 25% deposit to agree a mortgage which means now the maximum is 75% Loan to Cost.

    Finance goal posts move all the time.

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