TRICKY WATERS: MSE has warned that 100 per cent mortgages also come with a greater risk of negative equity if house prices drop has recently been launched in the UK - the first of its kind since the 2008 financial crash.
says he has “mixed feelings” about the new product. Though he did agree that it could be a “sensible” option for some renters., Martin was quoted as saying:"Having campaigned for years to try and help mortgage prisoners locked in at hideous unaffordable rates – the spectre of 100 per cent mortgages returning leaves me with mixed feelings.
You are only permitted to borrow an amount equal to, or less than, what you pay in rent each month, which may be restrictive for some people. So, for instance, if your rent is £1,000 per month, you might be able to borrow £163,000, subject to affordability considerations.According to MSE, while the Track Record Mortgage offers a fixed rate of 5.49 per cent for five years, there are more affordable deals available if you can save up even a small deposit.
"If we took the average rent 12 months ago , assuming no increases, this equates to £60,360 over a 5-year period in which equity could have built up, reducing the risk of negative equity for both lender and homeowner. This should be seen as a significant milestone and will hopefully see other lenders make similar steps towards supporting first-time buyers.
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