Skipton launches new 100% mortgage for first-time buyers

May 15, 2023

Are you a first-time buyer in the UK looking to purchase your own home? If so, you may have heard about Skipton’s new 100% mortgages being offered to those who have rented for 12 months or more. Understanding what this opportunity offers and how it can help you can be complicated, but don’t worry – we’re here to break it down and make sure that all of your questions are answered! In this post, we will discuss everything you need to know about the 100% mortgage from Skipton including eligibility requirements, benefits and tips on how to decide if it is the right mortgage for your situation.

Overview of the 100% mortgages from Skipton

Skipton Building Society offers a variety of mortgage options to suit the needs of their customers, including the highly sought-after 100% mortgage. This type of mortgage allows buyers to borrow the entire cost of a property, without having to put down a deposit. While this may seem too good to be true for some, Skipton is committed to making homeownership a reality for those who may be struggling to save up for a down payment. The 100% mortgage is subject to certain eligibility criteria, but for those who qualify, it can offer a fantastic opportunity to get on the property ladder faster than they may have thought possible.

Eligibility criteria for the 100% mortgages from Skipton

In order to be eligible for the 100% mortgage from Skipton, applicants must meet a few requirements. They must have been renting for at least 12 months and must have a good credit score with no past arrears or County Court Judgements (CCJs). Applicants are also required to have an income of £25,000

Applicants must also be first-time buyers aged 21 or above and must have been up to date on all rental payments and household bills (such as council tax and electricity/gas) over the past 18 months. Additionally, they must not have any defaults on other repayment commitments such as Netflix subscriptions or mobile phone repayments in the last 6 months.

This mortgage isn’t available for new build flats and is fixed for 5 years.

Pros and cons of taking out a 100% mortgage

Taking out a 100% mortgage can be an enticing option for first-time buyers who are struggling to save up for a down payment. With this type of mortgage, borrowers can secure a loan without having to put down any money upfront. However, there are definitely some important factors to consider before making the commitment. One downside to a 100% mortgage is that you may be required to pay a higher interest rate than with a more traditional mortgage. Additionally, without any equity in the property to start with, you may be at risk of falling into negative equity if house prices decrease. On the other hand, a 100% mortgage can help you get onto the property ladder sooner, potentially allowing you to start building equity at a younger age. Ultimately, it’s crucial to weigh up all the pros and cons before deciding whether a 100% mortgage is right for you.

How much can you borrow?

To give you an idea of how much you could potentially borrow with this type of mortgage, we’ve put together some examples below:

Monthly rent = Maximum mortgage (*)

  • £500 = £81,000
  • £750 = £123,000
  • £1,000 = £163,000
  • £1,250 = £204,000
  • £1,500 = £244,000
  • £2,000 = £325,000

(*) Note that Skipton’s specific affordability calculations might mean you’re not able to borrow as much as displayed in the table.

If this sounds like something that could work for you then make sure to use Skipton’s Affordability Calculator to get an accurate estimate of how much you could borrow.