The Mortgage Hut has access to over 12,000 mortgage products from 90 UK lenders including Skipton, who have launched a 100% mortgage requiring zero deposit.
We can check your eligibility without damaging your credit score, so read on, get in touch, and we’ll tell you whether you’re a candidate for the new Track Record mortgage.
If you are fantastic, if not, there are plenty of other options to consider.
This 100% mortgage guide includes the following:
Track Record mortgage product information
Eligibility criteria for Skipton’s new product
What to consider about 100% mortgages
What to do next if you want to apply
Are you stuck renting?
The number of households renting has more than doubled in the last two decades in England and Wales, as home ownership rates fell.
The number of adults living with parents in England and Wales rose by 700,000 in a decade. Many have moved out but returned to their parent’s home because of skyrocketing rent and living costs.
Deposit requirements stop people from owning property
Usually, banks and mortgage lenders don’t provide 100% of a property’s value unless you have a guarantor or additional security. Instead, they lend anywhere up to 95% and require you to put the other 5% yourself.
The problem lots of buyers face, particularly first-time buyers, is that they don’t have a 5% deposit. For a home valued at £200,000, that’s £10,000.
Many mortgage lenders require 10%-15% for a deposit
And that’s not easy with today’s economy unless you have help from parents or a high-paying and reliable job that has allowed you to save while paying rent.
Here’s how much deposit you could need to buy a house in your area according to the ONS (based on the average house price, by English region, in February 2023):
Area | Avg house price | 5% deposit | 10% deposit | 15% deposit |
South East | £396,000 | £19,800 | £39,600 | £59,400 |
South West | £327,000 | £16,350 | £32,700 | £49,050 |
London | £532,000 | £26,600 | £53,200 | £79,800 |
East of England | £358,000 | £17,900 | £35,800 | £53,700 |
East Midlands | £250,000 | £12,500 | £25,000 | £37,500 |
West Midlands | £254,000 | £12,700 | £25,400 | £38,100 |
Yorkshire | £207,000 | £10,350 | £20,700 | £31,050 |
North East | £160,000 | £8,000 | £16,000 | £24,000 |
North West | £214,000 | £10,700 | £21,400 | £32,100 |
Homeownership can happen with a 100% Mortgage
Things are changing and now with the release of the new Skipton zero deposit mortgage, owning a home could be a possibility.
The hurdle of saving a chunky deposit while also keeping up with rent, energy costs and other increasing bills has been removed, allowing a generation of first-time buyers an opportunity to get out of renting and into their own place.
What should I know about the 100% Mortgage from Skipton?
You don’t need a deposit but you can put up to 5% if you want to
You don’t need a guarantor
The mortgage is set with an interest rate of 5.49%
The rate is fixed for 5 years (so it won’t go up or down when there are changes to interest rates in the UK)
Am I a good candidate for a Skipton Track Record Mortgage?
This mortgage has been created so that renters can get onto the property ladder by using evidence of rental payments and bills.
You’ll need to be a first-time buyer with 12 months of evidence to show you’re a reliable renter that meets their financial obligations. Your track record of paying on time and in full will be assessed by Skipton Building Society, along with other factors like your credit score, job stability and income.
I’ve had bad credit - can I get a 100% Mortgage with Skipton?
It’s possible.
One of the ways Skipton Building Society will deem whether you’re eligible for their mortgage is by looking at your credit report. They use Experian to check credit history, so download your report for free and see what they can see. If there are any missed payments within the last 6 months, you won’t be eligible for a no deposit mortgage with them.
If the bad credit incident happened before that and it’s been settled, or you’re repaying via a payment plan, you could improve your chances of getting approved.
Your financial situation as a whole will be looked at to assess whether you’re in a good position to repay a hypothetical 100% mortgage with Skipton, so ask a mortgage broker for their advice. Our brokers can check your eligibility and be honest about your options.
Will an eligibility check for a 100% Mortgage affect my Credit?
Whenever a hard credit check is carried out on you, your credit report updates. Other lenders can see you’ve enquired about borrowing and if you’ve tried to borrow from various sources within a short period of time, that can make future lenders feel uneasy about your approach to borrowing.
When you contact The Mortgage Hut, tell the advisor you want an eligibility check and they’ll help you quickly. They’ll hear (or read) about your circumstances and then with your permission, check your eligibility and tell you if you’re a good fit and whether you’re likely to be approved with Skipton.
It doesn’t take long but it’s such a good idea if you’re considering applying. Never apply for a mortgage or loan without checking to see if you’ll get approved beforehand. If you were to get rejected, it could be marked on your credit report for other lenders and even potential employers to see.
Eligibility criteria for the Skipton Zero-Deposit Mortgage
Each applicant must be a first-time buyer
Each applicant must be aged 21 or over
Must have 12 months' proof of having paid rent within the last 18 months
The same people on the rental agreement used to prove payment history must be the same name on the mortgage application
Each applicant must not have missed any payments on credit agreements within the last 6 months
Must also have 12 months experience of paying bills on time
The monthly mortgage payment must be equal to or less than the average of the last 6 months' rental cost
If applicants want to contribute a deposit, it must be less than 5%
Maximum loan size is £600,0000
Not available on new build flats
Can I get a Skipton Track Record Mortgage if I’ve moved back home?
Moving out and then moving back home is called “boomeranging” and over 4.9 million people have done it in the UK according to ONS data.
Across England and Wales, young men living with their parents outnumber young women by about three to two, and there has been an almost 15% rise in the number of “non-dependent adult children” living at home.
The Skipton 100% mortgage criteria does allow for this but you’ll need to hurry to meet the 6 month allowance period. The lending criteria for the Track Record Mortgage requires 12 months of evidence for rental payments within the last 18 months. So, if you’ve rented for 12 months, moved out and lived elsewhere for less than 6 months, you could be eligible.
If it’s been more than 6 months since you last rented for at least 12 months, then you won’t be eligible, unfortunately.
How much could I borrow with a Zero-Deposit Mortgage?
You’ll need to know the average rent you’ve paid over the last 6 months. To find this out, look at your total rent paid and divide it by 6.
The calculation for your maximum borrowing amount is based on that and the length of term you choose to repay your mortgage over. Skipton’s 100% mortgage product has a term time between 5-35 years.
Skipton 100% mortgage borrowing examples
The table below gives examples to show you how much you could borrow over 35 years, based on a rate of 5.49% but to get a precise figure based on your unique circumstances, ask here.
Monthly Rent (mean avg over last 6 months) | Maximum borrowing power based on avg rent |
£500 | £93,221 |
£750 | £139,831 |
£1,000 | £186,442 |
£1,250 | £233,052 |
£1,500 | £279,662 |
£1,750 | £326,273 |
£2,000 | £372,883 |
Is a 35-year mortgage term a good idea?
Some people take out a mortgage over 20 years, whereas others go for 35 but how long is right for you will depend on your financial situation. With Skipton’s Track record Mortgage, you can borrow between 5-35 years.
Remember, the longer your mortgage term, the higher amount of interest you could pay.
There are advantages for a longer mortgage term though, for example, while the overall mortgage may be more expensive, the monthly repayments are spread over a longer period and are therefore lower.
That’s not always the case, as you may consider remortgaging in the future to a lower rate or repaying your balance early.
Part of a mortgage broker’s job is to show you changes in monthly repayments based on different options, for example, a shorter term vs a longer term. Seeing these differences and how they affect your pocket can help you to make the right decision about what’s best for you.
What to do next
Get the evidence you need for your 12 months of rental payments - that’s either 12 months of bank statements or a letter from your letting agent
Find your ID - accepted forms of ID are a current signed passport or current photocard driving licence (full or provisional).
Check your eligibility for a no-deposit mortgage with a Mortgage Hut advisor - it’s free and doesn’t damage your credit score.
WhatsApp us or use the quick contact form here if you’d prefer. Many of our team work in our offices, so you’re welcome to visit for an appointment or call 023 8098 0304.