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The Sun
20-05-2025
- Business
- The Sun
Another big lender launches ‘crucial' no deposit mortgage in a boost for first-time buyers
ANOTHER big lender has jumped on the bandwagon, launching its first no deposit mortgage in a huge win for first-time buyers. Gable Mortgages has announced the launch of its first zero-deposit mortgage products. 1 This follows a similar announcement last week from April Mortgages, signalling a potential shift in the market towards helping first-time buyers overcome the deposit hurdle. A 100% mortgage allows you to borrow the entire purchase price of the property, meaning no deposit is required. Gable Mortgages is offering a standard five-year fixed-rate mortgage at 5.95% and a new-build version at 5.65%, both requiring no deposit. The lender aims to support first-time buyers, key workers, and primary residents. Compared to many other lenders, Gable offers a standard mortgage allowing borrowers to secure up to 4.49 times their annual salary. For key workers in specific professions, this increases to 5.5 times their salary. For example, someone earning £40,000 a year could potentially purchase a home worth £179,600 without any savings, and this amount could rise to £220,000 if they are a key worker. To qualify for a Gable mortgage, applicants must be at least 23 years old, borrow a minimum of £125,000, and apply through a mortgage broker. Justin Le Roux, chief executive of Gable Group, said: "This is a significant milestone for Gable Mortgages as we launch our first two products into the UK. "We understand how hard it is for first-time buyers to get onto the property ladder, which is why we have created our zero-deposit mortgage solutions." Why you should be cautious with 100% deposit mortgages THESE types of mortgages can open doors for people who wouldn't be able to get on the housing ladder otherwise. Experts have generally seen the reintroduction of 100% mortgages as a positive thing and this deal from April Mortgages does have rigid lending criteria. But it's important to remember this deal won't be for everyone and they can be seen as quite controversial home loans. 100% mortgages mean you don't need a deposit - but it also puts buyers at higher risk of negative equity. This is when your mortgage is more than the total value of your home, which can happen if house prices fall. If you're in this position it can make it harder to remortgage, sell your home and get competitive rates from lenders. Typically they also have higher interest rates, making them more expensive. The general rule is that the smaller your deposit the higher your monthly mortgage repayments will be. Therefore because you won't have a deposit, your monthly repayments are likely to be more expensive compared with someone who did put down a deposit. You will need to be sure you can keep up with the payments and account for any potential financial shocks. 100% mortgages disappeared after the financial crisis in 2008, as they were seen a contributor to the sub-prime housing bubble and subsequent collapse. Unlike Gable's offer, April Mortgages' zero-deposit mortgage comes with different features and requirements. It requires a minimum household income of £24,000 and a property value of over £75,000. Borrowers can secure up to 4.49 times their annual income, with the option of 10 or 15-year fixed terms. Additionally, there are no early repayment charges, but the product does not offer specific benefits for key workers. Nicholas Mendes, mortgage technical manager at John Charcol, said: "Gable Mortgages' new zero deposit five-year fixed deal is a crucial addition to the options available for first-time buyers, particularly those who are finding it increasingly difficult to save for a deposit while contending with record-high rents. "Coming hot on the heels of April Mortgages' launch last week, it shows lenders are starting to respond to the challenges faced by aspiring homeowners who are mortgage-ready in every way except for the deposit." The average deposit in the UK is now over £60,000, making saving a significant challenge. In London, this figure rises to £100,000. Before the 2008 financial crash, 100% mortgages were more common but largely vanished as lending rules became stricter. Now, with Gable and April reintroducing these products, other lenders may soon join the market. Nick added: "Increased competition could lead to better pricing, more innovation and a wider range of options for first-time buyers." Other lenders are also making it easier for first-time buyers by reducing affordability rules. Accord, for example, offers a £5,000 deposit mortgage. How to get the best deal on your mortgage IF you're looking for a traditional type of mortgage, getting the best rates depends entirely on what's available at any given time. There are several ways to land the best deal. Usually the larger the deposit you have the lower the rate you can get. If you're remortgaging and your loan-to-value ratio (LTV) has changed, you'll get access to better rates than before. Your LTV will go down if your outstanding mortgage is lower and/or your home's value is higher. A change to your credit score or a better salary could also help you access better rates. And if you're nearing the end of a fixed deal soon it's worth looking for new deals now. You can lock in current deals sometimes up to six months before your current deal ends. Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost. But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal - but compare the costs first. To find the best deal use a mortgage comparison tool to see what's available. You can also go to a mortgage broker who can compare a much larger range of deals for you. Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender. You'll also need to factor in fees for the mortgage, though some have no fees at all. You can add the fee - sometimes more than £1,000 - to the cost of the mortgage, but be aware that means you'll pay interest on it and so will cost more in the long term. You can use a mortgage calculator to see how much you could borrow. Remember you'll have to pass the lender's strict eligibility criteria too, which will include affordability checks and looking at your credit file. You may also need to provide documents such as utility bills, proof of benefits, your last three month's payslips, passports and bank statements.
Daily Mail
19-05-2025
- Business
- Daily Mail
Another lender launches 100% mortgages for first-time buyers
A new mortgage has been launched offering the chance to borrow 100 per cent of a property's value - the second such deal in less than a week. Little-known lender Gable Mortgages, which was founded in 2024, is providing home loans which don't require the borrower to put down any deposit. It follows April Mortgages ' launch of a similar 100 per cent product last week. No-deposit mortgages have been extremely rare in recent years, with most lenders requiring the borrower to put down at least 5 per cent. Those that do offer deposits lower than that often require a parent to act as a guarantor. According to Gable's website, its products are aimed at 'generation rent' who can manage to pay their rent - which may be higher than a mortgage on a similar property - but struggle to save a deposit. Justin Le Roux, chief executive of Gable Group, said: 'There is a whole generation of renters out there who are struggling to save to buy and pay their rent at the same time. 'This has made it significantly harder for first time buyers, especially key workers get onto the property ladder. 'We believe in changing this by offering a solution where the buyer can get a quick decision based on affordability and not – like so many other products on the market – based on what they have managed to save up or borrow from the bank of mum and dad.' The lender has two products available -a standard mortgage, and one that is specific to new-build buyers purchasing a home from a list of 'partner' developers. Comparably to many other lenders, Gable's standard mortgage allows borrowing of 4.49 times the buyer's salary. This rises to 5.5 per cent for key workers in certain professions. It means someone earning £40,000 a year could hypothetically buy a home worth £179,600 without any savings - and if they were a key worker, that could rise to £220,000. Gable borrowers need to be aged at least 23 and want to borrow a minimum of £125,000. They must also go through a mortgage broker. Both of the mortgages are offered on a five-year fixed term only. This is different to April Mortgages, where borrowers must fix for 10 or 15 years. The rate on the standard mortgage is 5.95 per cent, and on the new-build mortgage is 5.65 per cent. This is substantially more expensive than the mortgages available for those who could save a 5 per cent deposit. For example, Monmouthshire Building Society has a five-year fix at 4.75 per cent with a £1,409 fee, while Nationwide offers one at 4.79 per cent with a £1,167 fee. Someone borrowing a £200,000 mortgage over 30 years would pay £1,043 every month on the Monmouthshire 5 per cent deposit mortgage, compared to £1,193 on the standard Gable 0 per cent deposit mortgage. On April's rival 100 per cent mortgage, the interest rate initially starts at 5.99 per cent, but this can be reduced over time as the debt is repaid. Gable borrowers will need to look out for the fees, which are considerably higher than those charged on with-deposit mortgages with other lenders. On the standard mortgage, they are tiered depending on the value of the property and range from £2,095 on a property worth between £125,000 and £200,000, to £4,995 on a home worth £400,000 to £500,000 and £9,995 on a home worth between £800,000 and £1million. On the new-build mortgage, though, the fees are paid by the developer. With most mortgage lenders, the arrangement fee is the same no matter what the property price, and usually ranges from nothing to about £2,000. Borrowers will also want to look at the legal fees on Gable's mortgages. If they choose to use Gable's partner solicitor, they will pay between £2,395 and £2,995 in total, including their own conveyancing and Gable's legal costs. It is standard in the industry for mortgage applicants to pay the lender's legal costs, although some offer 'fee-free legals' deals. However, if a Gable borrower chooses to use their own solicitor, they will need to pay £1,495 to cover Gable's legal fees, as well as their own conveyancing solicitor's fees on top. According to Compare My Move's Cost of Moving House Index, the average conveyancing fee in 2024 was £1,567. Are 100% mortgages a good idea? While no-deposit mortgages will help more people get on the property ladder, reactions to them in the property industry are often mixed. Some say that a person's long-term earnings and their ability to pay the mortgage each month are more important than their ability to save a one-off deposit. However, others raise concerns about negative equity, which is when house prices fall and the value of a home falls below that of the mortgage secured on it and makes it harder to remortgage or sell. They also recall the struggles faced by some buyers with 100 per cent mortgages during the financial crisis. Kylie-Ann Martin, mortgage broker at Selby-based KAG Financial, told the news agency Newspage: 'I truly believe there is a place for 100 per cent mortgages, if they are regulated in the right way. 'We speak to many people paying huge amounts of rent that would see a considerable reduction in costs when comparing this to a mortgage - so for some I think it is fantastic that more lenders are offering them an opportunity to become homeowners.' While Kundan Bhaduri of portfolio landlord and property developer The Kushman Group said: 'Gable and April Mortgages' zero-deposit products bear striking resemblance to Northern Rock's pre-2007 folly that culminated in Britain's first bank run since 1866 and left millions in negative equity. 'The UK property market already suffers from endemic structural issues. 'Injecting more unqualified buyers will further inflate prices whilst creating a new cohort of vulnerable homeowners.' Best mortgage rates and how to find them Mortgage rates have risen substantially over recent years, meaning that those remortgaging or buying a home face higher costs. That makes it even more important to search out the best possible rate for you and get good mortgage advice. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you To help our readers find the best mortgage, This is Money has partnered with the UK's leading fee-free broker L&C. This is Money and L&C's mortgage calculator can let you compare deals to see which ones suit your home's value and level of deposit. You can compare fixed rate lengths, from two-year fixes, to five-year fixes and ten-year fixes. If you're ready to find your next mortgage, why not use This is Money and L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you.
