Tenants with 12 months’ history of rent payments can qualify for a new zero deposit mortgage.
A minimum annual income of £25,000 is also required for the ‘Rent to Own’ home loan being offered by Hanley Economic Building Society.
The lender, which is based in Stoke-on-Trent, piloted the mortgage in its local area last year before now launching it nationally.
Amounts up to £350,000 are available at an interest rate of 5.79% fixed for five years.
Warnings
The ‘no deposit’ offer will be attractive to many potential homeowners, but it comes with warnings from brokers that there is a risk of falling into negative equity with small movements in the property market.
Some advisers stressed it may be better to start with a deposit however small, or opt for shared ownership. Nationwide and Lloyds, for example, both offer 95% mortgages.
Limits
The Hanley mortgage limits borrowers to payments that are 137% of their current rent amount, which could be a problem for any renters currently on a good deal.
Skipton Building Society was the first in recent years to launch a 100% mortgage offer for renters back in 2023. It was followed by other lenders including April and Gable last year.
There were warnings that some people would load themselves up with too much debt in the rush to climb onto the housing ladder.
The post Renters offered latest zero deposit mortgage appeared first on The Negotiator.
