Tenants advised – those 100% mortgages are tempting but risky

Joseph Lane, director of Mortgage Lane, warns that new 100% mortgages—recently launched by April Mortgages and Gable Mortgages—carry significant financial risks. While these products appeal to buyers unable to save for a deposit, Lane cautions that they may lack the financial discipline required for homeownership.

Key concerns include negative equity, where buyers start with 0% ownership of their property. If house prices fall, homeowners could face financial losses and struggle to remortgage or switch to better deals. Additionally, lenders may impose higher interest rates, arrangement fees, and stricter credit assessments, making these mortgages more expensive in the long run.

Lane advises prospective buyers to carefully assess the risks before committing to these products.