UK Sees Launch of First 0% Mortgage
Competition between banks and building societies seeking to attract homebuyers with smaller deposits has led to the launch of the first ever 0% mortgage in the UK. Implemented by Leeds Building Society, this new mortgage gives borrowers the option to pay no interest at all for as long as six months, allowing them more freedom to spend cash on home improvements or moving costs.
Buyers will still have to pay back any relevant capital during the protected 0% interest period, but brokers expect the new deal to be especially attractive for homeowners seeking more leeway during the initial months of their mortgage. The 0% mortgage deal would enable buyers who had depleted their savings on a deposit to more easily rebuild their finances or purchase essential white goods during their first few months in a new property. However, some brokers have warned that the flexibility of the 0% mortgage will lead to borrowers paying a higher than normal rate, so other lenders may still be able to offer cheaper deals to some.
The deal will be available to those with deposits of 10% or more. It contains a free valuation of up to £339, as well as a low fee of £199. Allowing borrowers to pay no interest for as long as six months offers the maximum flexibility possible, but the option to overpay by 10% also exists if the extra money is not a core priority.
With mortgage approvals recently having risen to a three year high, choosing the mortgage provider that will best suit your needs is vitally important for new property owners. At Reynolds Property Services, we lend our expert support to homebuyers seeking mortgages in Surrey and across the South East UK. Our mortgage advice is supplied by Nicky Reynolds, a fully qualified mortgage advisor with over 25 years of experience. You pay Nicky nothing for her services, so be sure to contact us if you require any help with your mortgage.