No deposit, no problem: the new 100% mortgages for first-time buyers

There are more mortgage deals on the market that enable people to boost their borrowing power with the help of a relative or friend. Photograph: Christopher Jones/Alamy View image in fullscreen There are more mortgage deals on the market that enable people to boost their borrowing power with the help of a relative or friend. Photograph: Christopher Jones/Alamy No deposit, no problem: the new 100% mortgages for first-time buyers Banks and building societies have started relaxing affordability rules and becoming more creative with products F or many first-time buyers, getting their foot on the property ladder can feel like an impossible dream. However, the good news is that there are a growing number of mortgage deals that require only a small deposit, or no deposit at all. Metro Bank is the latest high street lender to launch a deal that allows eligible first-timers to borrow up to 100% of the value of a property. Home loans that let people borrow 100% have been making a bit of a comeback – they were once fairly commonplace but were axed after the 2008 financial crisis. The Metro deal comes hot on the heels of a heavily promoted new first-time buyer mortgage from Lloyds that requires a minimum deposit of only £5,000. Over the past year or more, banks and building societies have been relaxing their affordability rules and becoming more creative with their mortgage products. However, comparing these these deals isn’t always straightforward because they all work in slightly different ways, and eligibility can vary between lenders, says David Hollingworth at the broker L&C Mortgages . View image in fullscreen Home loans that let people borrow 100% have been making a bit of a comeback. Photograph: Andrew Paterson/Alamy In May, Lloyds launched its mortgage with a minimum deposit of £5,000, which is equivalent to a maximum loan-to-value of a whisker over 98%. It is a five-year fixed deal with an interest rate (at the time of writing) of 5.89%. However, it is only available on homes worth up to £300,000, which means it probably won’t be an option for many buyers in pricier areas such as London, or for some considering a larger property. This deal is also available via the Halifax and mortgage brokers. While Lloyds is the largest lender so far to go above 95%, it is not the first. Santander has a similar deal that also lets people borrow up to 98% of a property’s value. Again, the deal is a five-year fixed-rate loan (currently 5.49%), but in this case you can borrow up to £500,000, and the minimum deposit is £10,000. Meanwhile, the Skipton and Yorkshire building societies have deals that allow people to borrow up to 100% and 99% of a property’s value respectively. The Skipton deal is aimed at current and recent renters and lets people borrow up to £600,000. It is a five-year fix with rates starting at 5.55%. The Yorkshire’s deal (again a five-year fix) has a maximum loan of £495,000 and a rate of 6.44%. There are also more deals coming on to the market tha