Are 100% Mortgages A Good Deal?

Most mortgage lenders will not offer the entire purchase price of the property, but a proportion of it. The maximum is normally 92%, with you putting up the extra 8% as a deposit. You might fall lucky and find a lender that will offer 100% mortgage, but be careful of negative equity. If house prices drop you will owe more than your home is worth.

Some buyers cannot afford a deposit so seek out lenders that offer 100% mortgages. However, keep in mind that you will still have expenses to pay, such as an evaluation, survey perhaps and also stamp duty and legal fees. So 100% mortgages are not normally a good deal.

If go for it though, and the repayments seem a bit steep, you can frequently start off paying less over a longer term and then increase your payments as you start to earn more. You can either pay extra each month later on, or make lump sum payments whenever you have the money to do it. This might cost you extra if you are on a fixed interest rate, so take a variable interest rate if you intend to repay in that way.