Skipton Building Society launches 100% mortgage aimed at renters
Skipton Building Society has launched a 100% loan-to-value mortgage for first-time buyers currently renting.
The 'Track Record Mortgage' maximum loan size is £600,000 and borrowers will need a clear credit history to qualify.
An estimated 4.6 million households are renting privately across England, a figure more than double (112%) than there were in 2000. Rental research from Skipton has also revealed that eight in 10 tenants feel "trapped" in the rental cycle, paying higher rents than a mortgage.
The no-deposit mortgage is available to borrowers who can demonstrate a track record of affordability of all monthly rent and household expenditures for a minimum of 12 months in the last 18-month period.
The monthly mortgage payment must equal or lower than the average of the last six months' rental cost. For example, if the average rent over the last six months is £800, the mortgage payment must be £800 or lower.
Skipton's maximum mortgage term is 35 years, and the top income multiple is 4.49x salary on this no-deposit product.
Who is eligible for the new 100% mortgage?
Borrowers may be eligible for this product if:
- Each applicant must be a first-time buyer aged 21 or over.
- Applicants cannot have any missed payments on debts or credit commitments like mobile phones within the last six months.
- They are not looking to buy a new build flat.
- Borrowers will need proof of having paid rent for at least 12 months in a row within the last 18 months.
- They have 12 months of experience paying all household bills within the previous 18 months.
Aaron Strutt, product director at Trinity Financial, says: "Many people with aspirations to buy a property will be given hope they can finally get out of the rental market with this new mortgage.
"With a shortage of properties and increasing rents, Skipton's five-year fixed seems like good value for money. If this product succeeds, other banks and building societies will be keen to bring out similar products, especially when lenders are not issuing as many mortgages as they would like to be and purchase transactions are down."
What is the mortgage rate?
Skipton's 100% mortgage rate is 5.49%, and it is fixed until 30 September 2018. The mortgage does not have an arrangement fee, and after the fixed rate period, the mortgage reverts to the lender's 6.54% standard variable rate. Early repayment charges apply during the fixed rate period.
Representative example: A capital and interest mortgage of £300,000 payable over 30 years, initially on a fixed rate basis until 30 September 2018 at 5.49% and then on a standard variable rate currently 6.54% for the remaining 25 years, 5.49% would require 64 monthly repayments of £1,700.01 followed by 297 payments of £1,835.03. The total amount repayable would be £652,084.52 made up of the loan amount, plus interest (£354,116.68) and £0 (product fee), £95 (final repayment charge), £20 (completion fee). The overall cost for comparison is 6.3% APRC representative.
Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation
The information contained within was correct at the time of publication but is subject to change.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
Borrowers will need 12 months confirmation of rent payments. They will need confirmation from the lettings agent (ARLA or other suitably registered lettings association e.g. NAEA, NACA) on headed paper, detailing the 12 monthly rent payments.
The maximum mortgage amount on Skipton's 100% Track Record mortgage is £600,000.
Yes. Overpayments of up to 10% of the original balance each year are permitted without early repayment charges.
An early repayment charge will apply if borrowers repay their mortgage early or make an overpayment that's more than their annual overpayment allowance.
This will apply during the initial five years fixed rate period of the Track Record mortgage.
Yes, we will consider second-hand flats, however, new build flats are not accepted.
A new build flat is one that is being sold for occupation for the first time, which has been newly built or converted within the last three calendar years.
The same people who are renting now and have been for the last 12 months can apply for the new 100% mortgage.
If applying alone, the rental and household expenditure payments must have been covered entirely for 12 consecutive months within the last 18 months.
Joint applicants who have been renting separate properties will be eligible. A maximum of four people can go on an application.
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