6th September 2011

The return of 100% Mortgages

I was very interested to read that Aldermore, a small bank set up in 2009, is to become the first British lender to offer mortgages to borrowers without a cash deposit since such loans were withdrawn during the financial crisis.  I understand that this product will be launched during September and will allow home buyers to borrow up to 100% of a property’s value as long as they have a parent, grandparent or guardian willing to support the loan.  The big High Street lenders have moved away from these 100% mortgages since the credit crisis but  Aldermore are looking to mitigate its risk by stipulating that 25% of the loan is guaranteed by parent/grandparent or legal guardian through a charge on their own property.  The deal will be open to borrowers across England and Wales up to a maximum loan of £250,000.00.  The guarantee will fall away after 10 years.  Whilst this product is currently only available to borrowers in England and Wales I think this is a very positive development and will assist first time buyers to get onto the ladder.  I advise that I have written to Aldermore to try and encourage them to come into the Scottish market and I shall let you know as soon as I receive a response from them. 

All in all a positive step.

Lindsay Darroch
Head of Property



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