A new 100% or no deposit mortgage has been launched on the market by the same lender that is now also offering seven times income home loans.
April Mortgages’ offer is different to other similar deals already in the marketplace as it comes without the usual demands for collateral guarantees.
Avoid traps
Borrowers have to agree to a fixed rate for 10 or 15 years, starting at 5.99%, which April says will help homeowners avoid negative equity traps.
Mortgages without a deposit normally require a guarantor to step in if the person defaults on payments.
There is a minimum income requirement of £24,000 to qualify for the new 100% mortgage.
Generous
Last month, Dutch firm April hit the headlines when it extended its income to loan ratio to seven.
The most generous mortgages are usually four-and-a-half times income, so April’s offer was a significant extension.
Again, borrowers have to commit to a 10 or 15-year fixed deal to secure the new multiple income offer.
Credit crash
This kind of high income to loan ratio, and the 100% mortgage, are offers reminiscent of the market before the credit crash of 2008-09.
Loan rules were tightened after the financial crisis, when many people defaulted on their mortgages with terms that were widely-recognised as too risky.
Official figures have just revealed a 31% increase in mortgage repossessions in the last year.
Renters mortgage
In 2023, Skipton Building Society launched a 100% mortgage to renters.
The lender, which is the parent company of Connells and Countrywide, provides deposit-free home loans to tenants who can prove they pay their rent on time.
