Are 100% Mortgages Dead?

Explanation of 100% mortgages.

What are 100% Mortgages?

100% Mortgages, now a preserve of the past, were a mortgage (homeloan) for 100% of the value of the property being ‘Mortgaged‘. The interest rates for these types of mortgages are usually higher, due to the increased risk the lender takes because of the lack of deposit, and high loan amount.

Mortgage providers also offered 125% Mortgages, to allow the buyer to, for instance, pay for valuations, legal fees or home furnishings.

In the year 2006, about 2 percent of mortgages were based on a 100% of value mortgage (src = Council Mortage Lenders). Continue reading »