New British bank offering 100% mortgages

Aldermore is a recently launched British bank that is going to offer first time buyers an easier way to get into the housing market than a normal mortgage. The new mortgage by the company is targeted at those first time buyers who are struggling to buy property. It will offer a 100 per cent LTV so that people without large sums for a deposit will be able to get on the property ladder.

The catch is that the mortgage will be secured against the home of a relative for the loan amount over 75 per cent LTV. The rate on the mortgage will be fixed at 6.48% for three years. Manager of Mortgages at Aldermore is Charles Haresnape, and he has said of the new mortgage, “We at Aldermore think that the greatest reason why young people are not getting into the housing market is because they cannot afford the large deposit that most lenders require. This mortgage will allow more people to buy homes and will greatly benefit the slow property market.

“Saving money for a deposit is just one extra strain on expenses that someone buying a home does not need. Many people will be able to easily afford the monthly payment if they can get past the deposit stage. We do this by securing the mortgage on the property of a relative.

“Many young people today still turn to their parents for the initial deposit on a house and this is how most people afford to get their own house. In these economic times, parents might not have the capital to make this loan. Our mortgage gives them a more flexible option, even if it is just to be able to hold onto some savings.”

This mortgage will be trialed through three providers, Arun Estates, 3mc and Connells Group. The mortgage will be available to those wanting to buy homes in England and Wales. There are some small fees associated with the mortgage, which include a £299 fee for booking and a £999 charge when the mortgage is completed. There is also the restriction that the buyer must be over 25 and the value of the mortgage cannot be over £250,000.

Connells Chief Executive is David Livesey and he has commented, “People seem to have lost interest in owning a home because of the bad situation for first time buyers. Young people have accepted that they will just have to rent and have given up on home ownership.

“At Connells we want to help people get onto the property ladder and this new mortgage is going to help us to achieve this goal. We will be making this new mortgage available all across the UK by using out network of mortgage experts.”

Doug Hall is from 3mc and has said, “Brokers are fully aware of the problem for people of getting the initial deposit sorted out. Aldermore’s mortgage is a good solution that works well for both the lender and the borrower.”