100% mortgages are back! Everything first time buyers need to know

100% mortgages are back! Everything first time buyers need to know

You’ve probably already heard the news: as of May 2023, 100% mortgages are back after Skipton Building Society launched its new ‘Track Record’ mortgage. 

The first of its kind, the mortgage is specifically designed for first time buyers who are renting, as it aims to bridge the gap between generation rent and generation homeowner. So if you are a) renting, b) wanting to buy your first home, and c) struggling to cobble together a hefty deposit — this new 100% mortgage could be the solution. 

The lender announced the monumental news on May 8th 2023 and became the latest lender in the UK to offer a 100% mortgage since 2008. 


‘It could help a lot of people stuck in the rental market’

“This mortgage won’t be fitting for everybody,” award winning mortgage adviser, Jo Jingree, and director of Mortgage Confidence, says. “But it could help those trapped in the rental market looking for a way out.”

“Many lenders have shied away from 100% mortgages since 2008,” Jo explains. “But times have changed and life has become a lot more expensive. In 2023, UK property prices cost around nine-times average earnings, most salaries haven’t kept up with the rate of inflation and many of those renting have student loans they are still trying to pay off. All of which makes paying rent, bills and saving for a five-figure deposit hard or, in some cases, impossible. 

“I think the Track Record mortgage is a great initiative that could help a lot of people,” Jo says. 


Skipton Building Society’s 100% mortgage: how does it work?

Unlike many other 95% mortgages or no-deposit mortgage products on the market right now, Skipton Building Society’s Track Record mortgage doesn’t require a guarantor’s backing. 

Instead, along with looking at your credit score (which most lenders use to assess the risk of lending to you), the mortgage takes into consideration a renter’s track record of making successful rental payments and paying household bills on time. If you meet all of the lender’s strict eligibility criteria (which we’ve listed below), you could access a 100% mortgage — meaning you won’t need a deposit. 

Another catch is that the monthly mortgage payment must be equal to or lower than the average of the last 6 months rental cost. So if you currently pay £1,500 on rent each month, your mortgage from Skipton Building Society couldn’t cost you more than the equivalent £1,500 a month. 


The small print

As we mentioned, Skipton Building Society’s Track Record mortgage comes with a few caveats. These include:

  • You’ll need to be a first time buyer and 21 years old or above.
  • You’ll need to have been renting for at least 12 consecutive months out of the past 18 and be up to date on all payments during this time period. You’ll need to show proof of this — this could be via bank statements or a letting agent confirmation letter. 
  • Bill wise, you’ll also need to be up to date for the last 12 consecutive months out of the past 18 on household bills. For example council tax, and electricity or gas. Again, proof will be needed. 
  • You can’t have missed any other repayment commitments over the past six months. Be it mobile phone payments or even a Netflix subscription. 
  • The same people who are renting now (and have been for the last 12 months) must be the same people on the mortgage. 
  • This mortgage doesn’t apply for a new-build flat. 
  • You can’t borrow more than £600,000.
  • If you happen to have a deposit, it must be less than 5% of the purchase price.
  • This is a fixed rate mortgage. 
  • The monthly mortgage payment must be equal to or lower than the average of the last 6 months rental cost.

Not right for you? Cast your eye over these mortgage options

Just last month we spoke about a range of other mortgages on the market right now. 

From a Family Springboard Mortgage, which gives you the chance to borrow 100% of the property purchase if a very generous family member puts 10% of the property price into a ‘Helpful Start’ savings account. To a Concessionary Purchase, which is where some lenders give you the option to put down equity instead of cash. 


Explore your options

Over the past 20 years, Jo has helped hundreds of first time buyers complete their dream of becoming a homeowner. From those who are credit impaired or self employed, take the opportunity to get in touch using Jo’s 30-minute free no-obligation phone call. 


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