Discover how Skipton’s Zero-Deposit Mortgage for Former Homeowners and Renters is changing the property market. Learn about eligibility, success stories, and responsible lending practices in our in-depth article.
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Skipton Building Society is extending its ‘zero-deposit’ mortgage offering, known as the Track Record mortgage, to provide support not only to first-time buyers but also to former homeowners who have transitioned into renting. This expansion aims to assist individuals who have faced obstacles like divorce or relocation, helping them re-enter the property market. In this article, we’ll explore this development and its potential impact.
- Skipton Building Society’s Track Record mortgage now extends its support to former homeowners who have been out of the property market for up to three years, in addition to first-time buyers. This feature broadens the pool of potential applicants.
- Since its initial launch, the Track Record mortgage has garnered over £40 million in mortgage applications, with more than half of applicants choosing terraced homes and a notable presence from Scotland.
- The Track Record mortgage offers a competitive fixed interest rate of 6.19% over a five-year term, with no fees. This feature aligns with the market average and makes homeownership more attainable for eligible individuals.
- Skipton emphasizes responsible lending by ensuring that applicants’ monthly mortgage payments do not exceed the average of their last six months’ rental costs, promoting affordability and financial stability.
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Expanding Eligibility:
Former homeowners who have been out of the property market for the past three years can now apply for Skipton’s Track Record mortgage, alongside first-time buyers.
Previous Success:
Since its initial launch in May, the Track Record mortgage for first-time buyers has garnered over £40 million in mortgage applications. More than half of the applicants have opted for terraced homes, and nearly a fifth have come from Scotland.
Skipton’s Zero-Deposit Mortgage: The Track Record Mortgage Details:
This mortgage product is a five-year, fee-free, fixed-rate offering with an interest rate of 6.19%, and it can be stretched over a maximum term of 35 years. Notably, the average five-year fixed mortgage rate across all deposit sizes in the market is also 6.19%, as per Moneyfacts data.
Addressing Rental Challenges:
Charlotte Harrison, Skipton’s Chief Executive of Home Financing, emphasized the importance of helping individuals break free from the cycle of renting, which has become a significant housing challenge in the UK. Escalating rents and the cost of living have made saving for a traditional house deposit increasingly difficult.
Eligibility Criteria:
To qualify for this mortgage, tenants aged 21 and above must demonstrate a strong rental payment history, including a minimum of 12 months of rental history. Evidence of this history can be provided through bank statements or letters from registered letting agents.
Responsible Lending:
As a responsible lender, Skipton ensures that the monthly mortgage payment for each applicant does not exceed the average of their last six months’ rental costs. For instance, if someone has been paying an average of £800 per month for the past six months, their maximum monthly mortgage payment would also be £800.
Property Type:
Skipton does not provide mortgages for new-build flats, but they do accept applications for new-build houses.
Skipton Building Society’s expansion of the Track Record mortgage aims to address the challenges faced by former homeowners-turned-renters, allowing them to re-enter the property market and ultimately secure homeownership. This move reflects the society’s commitment to providing accessible housing finance solutions in the UK.
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