First-time buyers hit by disappearance of the 100 %-plus mortgage

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First-time buyers hit by disappearance of the 100 %-plus mortgage

Fri 29th Feb 2008

As the availability of 100 per cent-plus mortgages declines, "yet another door is closed for first-time buyers", the head of mortgages at moneysupermarket.com has said.

Louise Cuming warned the if people are unable to get on the first rung of the property ladder, it will make it "harder and harder to get new lifeblood into the mortgage industry".

The 100 per cent-plus mortgage offered borrowers more than the total cost of their property, contributing towards deposits, furnishings and other expenditures home-buyers may have.

Following the credit crisis stemming from the collapse of the US sub-prime mortgage market, lenders are increasingly unwilling to make 'risky' loans.

Mortgage lenders Northern Rock, Alliance & Leicester, Birmingham Midshires and Abbey have all now begun to require borrowers to supply the deposit on a new home themselves and have withdrawn their 100 per cent mortgage options.

However, Ms Cuming believes most borrowers and lenders were entering into a 100 per cent mortgage deal fully aware of the risks entailed.

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