A 100 per cent mortgage is only advisable if you can pay for it and seems genuinely affordable, according to independent mortgage advisor John Charcol.
Research from the Portman Building Society indicates that house prices rose last year by just over 10 percent which added up to an extra £14,000 on to the cost of an average first-time buyers property.
A first-time buyer entering the market today would be borrowing more money, paying a larger deposit and interest rates than this time last year.
The market response has been to offer longer mortgages or, in some cases, 100 percent mortgages.
Ray Boulger, spokesperson for John Charcol, said the most important advice for consumers is to “borrow what can you afford.”
He added: “If you believe that property prices are going to rise, albeit modestly, then a 100 percent mortgage will be right for you. A 100 per cent mortgage will make sense as long as you can pay it and is it affordable.”
In related news, a monthly house price index operated by Rightmove saw annual growth fall from 13.5 per cent in January to 11.5 per cent in February, which may indicate slowing growth in the UK housing market.
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