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100 per cent mortgages solution for first-time buyers

New buyers taking out mortgages have increasingly chosen to secure loans on the full value of their home in order to get onto the property ladder, new research has shown.Studies by the Mortgage Advice Bureau revealed that almost one in ten mortgagers now opt to borrow the entire value of their property or more.The number of first-time investors selecting a 100 per cent mortgage rose by 21 per cent last year, while those borrowing more than their property was worth rose by 50 per cent.The Mortgage Advice Bureau attributed the acceleration in borrowing to rising property price inflation and interest rates hikes. It seems that 100 per cent mortgages are a way of facilitating new buyers to become homeowners without having to save up a deposit.Brian Murphy, lending manager at the Mortgage Advice Bureau, commented: "In attempts to make the transition on to the property ladder as easy as possible for these buyers, the option to borrow more than the value of their home is proving very popular."Many in the market still view these products as the final resort for mortgage borrowing. However, as seen through the increasing number of buyers opting for these products in 2006, these mortgages are now a very real solution for first-time buyers who stand little hope of entering the housing market without them."

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