It’s the first of its kind since the 2008 recession.
Martin Lewis has spoken out over the UK’s new £0 deposit mortgage deal.
The first of its kind since the 2008 recession, the deal launched last week.
MoneySavingExpert.com founder Martin Lewis says it could be a ‘sensible’ option for some people.
This type of deposit-free mortgage used to be quite common up until the 2008 recession; however, it has now returned to the UK, backed by a Dutch firm that has promised to fix its rates for ten years.
The rates for these mortgages start at 5.99% and are set to last for 10 to 15 years.
With most mortgages, buyers need to put down a deposit of around five to 20%; however with this one the lenders are able to finance all of it.
Lewis says he ‘cautiously welcomes’ the deal.
April Mortgages, a UK-based subsidiary of the Dutch asset manager DMFCO, has said that there are no restrictions on who can apply for a mortgage, only a household income of at least £24,000 is needed.
Things such as collateral or showing a history of previous rent paid are not required.
Lewis explained: “I’ve campaigned for years to try and help mortgage prisoners locked in at hideous unaffordable rates, and the spectre of 100% mortgages returning leaves me with mixed feelings.
“Years of property-porn TV shows have spouted the idea that you must buy a house as soon as possible, as big as possible – actually, the real priority is not to overstretch your finances.
“Before the 2007 financial crash, banks would simply throw mortgage loans out to anyone walking past a branch window; now we need to be more careful.”
He continued: “So Skipton Building Society’s criteria of requiring a good rental track record to prove someone can make mortgage payments is sensible, and so I cautiously welcome it, done carefully, after advice, as an option for some.”
