April Mortgages has introduced a no-deposit mortgage scheme, allowing buyers to purchase a home without any initial payment.
This initiative is aimed at first-time buyers and home movers who can manage monthly repayments but have not been able to save for a deposit.
Sam Fox, founder of the UK Mortgage Centre, said: “If you’re renting, have a reliable income and a clean credit history, but just can’t get a deposit together, this mortgage could be a game-changer.
“It won’t be for everyone – but for the right buyer, it’s a big step towards owning your own home.”
He highlighted the difficulties many face in saving for a deposit, given the current economic climate of rising rents, increased living costs, and stagnant wages.
Mr Fox explained how this new deal stands out from previous no-deposit products, saying: “Unlike some previous no-deposit products, there’s no need for a guarantor or family member to put up cash.
“It’s a standalone mortgage based on your income and creditworthiness.”
The interest rate on this mortgage reduces automatically as repayments are made, and there are no early repayment charges, offering flexibility to overpay or switch if circumstances change.
The 100 per cent mortgage allows buyers to borrow the full value of the property, with rates starting at 5.99 per cent.
Applicants must have a household income of at least £24,000, be purchasing a home worth over £75,000 in England or Wales, and have a clean credit history.
However, Mr Fox cautioned potential applicants about the higher rates and the risk of negative equity if house prices fall.
He also noted that the 10 or 15-year fixed rate offers security but is a long-term commitment.
