UK bank to offer 0% deposit mortgages in the UK

mariaalice

http://www.theguardian.com/business/2016/may/04/barclays-offers-0-percent-deposit-mortgage-to-home-buyers.

This is coming in the UK, now its not quite 100% mortgages as parents or someone have to provide the deposit as a loan to the mortgage issuer for 3 years. Its all starting again at least in the UK?

the groutch

Zero chance of that happening any time soon over here.

The days of Daddy stumping up the deposit are long gone, banks want to see evidence of people's ability to manage their finances via savings history.

And that doesn't even take into account the Central Bank's rules, which show no signs of being relaxed, despite the political will.

the groutch

the groutch wrote: »

The days of Daddy stumping up the deposit are long gone, banks want to see evidence of people's ability to manage their finances via savings history.

This isn't the case. All you need is around 6 months savings record/show ability to pay, the bulk of the deposit can still be a gift. Plenty of people still get most of their deposit from a gift.

The bank don't really care where your deposit comes from once you can show you are able to repay the mortgage, no way would there be as many houses being sold now if people weren't using gifts towards their deposits.

That said getting the deposit as a gift is very different to what is happening in the link and whats happening in the link is not a good road to be going down again.

Michael D Not Higgins

This is slightly different to 100% mortgages. While in practice it is a 100% mortgage, the 10% 'deposit' on hold does the same job as the equity stake a buyer would normally supply. It's a safety net for the bank, a certain amount of money at risk if the buyer defaults. At the end of the term the principal has been paid down by a certain amount (7.5% at the end of three years on a 25 year mortgage at 3%).

I don't agree with it however and pushing up the LTI multiple for these mortgages just helps fuel the house price inflation.

SarahMollie

Yikes, creative arent they.

Thankfully, I think theres no chance of that kind of carry on over here anytime soon.

This will just do what increased availability of credit always does, push up prices.

Makes me thankful for the CB rules.

Brioscai

Sounds like EBS old product.... family first mortgage.