Renting but Struggling to Save a Deposit? You Could Buy a Home With a 100% Mortgage

For many renters, one of the biggest barriers to buying their first home isn't being able to afford the monthly mortgage payments – it's finding the money for the deposit.

If you're already comfortably paying rent every month, potentially at a similar or even higher amount than a mortgage payment, saving £10,000, £20,000 or more on top can be extremely difficult.

However, there could be another option.

Skipton Building Society's Track Record Mortgage could allow eligible renters to borrow up to 100% of the value of a property – meaning you could potentially buy a home without needing a deposit.

What Is the Skipton Track Record Mortgage?

The Track Record Mortgage has been specifically designed for people who have demonstrated that they can consistently afford their rent but are struggling to save the deposit traditionally required to purchase a home.

Rather than requiring the usual 5% or 10% deposit, eligible applicants could potentially borrow up to 100% of the property's value.

For example:

£200,000 property – potentially borrow up to £200,000
£250,000 property – potentially borrow up to £250,000
£300,000 property – potentially borrow up to £300,000
£400,000 property – potentially borrow up to £400,000

Skipton currently allows borrowing of up to £600,000 through its Track Record Mortgage, subject to affordability and lending criteria.

Do I Need to Be a First-Time Buyer?

Interestingly, you don't necessarily need to meet the traditional definition of a first-time buyer.

Under Skipton's current criteria, none of the applicants can have owned a property in the UK during the last three years.

This means the mortgage could potentially be available to someone who owned a home in the past but has since returned to renting.

How Does My Rental History Help?

This is where the Track Record Mortgage differs from a traditional mortgage.

Skipton wants to see evidence that you've been successfully managing your housing costs as a renter.

Applicants generally need to demonstrate that rent has been paid for at least 12 months in a row within the last 18 months.

Skipton will then consider your rental payments alongside your income, expenditure and overall affordability when assessing how much you could potentially borrow.

In some circumstances, Skipton may allow a mortgage where the monthly mortgage payment is up to 150% of your average monthly rental payment over the previous six months.

This could potentially give renters greater flexibility when looking for their first home.

Who Could Qualify?

To potentially qualify for a Track Record Mortgage, some of Skipton's main current criteria include:

• All applicants must be aged 21 or over

• No applicant can have owned a property in the UK within the last three years

• You need evidence that rent has been paid for at least 12 consecutive months within the last 18 months

• You should have experience of paying household bills

• You must have had no missed payments on debts or credit commitments during the previous six months

• The maximum mortgage is currently £600,000

• The maximum mortgage term is 40 years

• If you do have a deposit, it must generally be less than 5% for the Track Record product

All applications remain subject to Skipton's full affordability assessment, credit checks and lending criteria.

What If I Have a Small Deposit?

You don't necessarily have to borrow the full 100%.

If you've managed to save a small amount, or your family has gifted you some money towards your purchase, Skipton can consider this too.

The Track Record Mortgage is specifically designed for borrowing above 95% LTV, so any deposit would normally need to be less than 5% of the purchase price.

If you've already saved a deposit of 5% or more, there may be other standard first-time buyer mortgages available which could be more suitable.

What Proof of Rent Will I Need?

You'll normally need to demonstrate your rental payment history.

This can potentially be evidenced using 12 months' bank statements showing your rent payments.

Alternatively, Skipton may accept a letter from an appropriately registered letting agent confirming the rental payments.

This is one reason why speaking to a mortgage broker before applying can be useful. We can look at how you've been paying your rent and establish what evidence is likely to be required before submitting an application.

What If I've Recently Moved Back in With My Parents?

You could still potentially qualify.

If you've recently moved in with family or friends to try to save some money, Skipton may still consider an application provided you can demonstrate 12 consecutive months of rental payments within the previous 18 months.

So moving back home temporarily doesn't necessarily mean you've lost the opportunity to use your previous rental track record.

Can Couples Apply Together?

Yes.

Joint applications can potentially include up to four applicants.

If you've been renting together, Skipton can consider the rent you've collectively been responsible for.

There can even be circumstances where two people have been renting separate properties and subsequently decide to purchase a home together.

This can make the Track Record Mortgage particularly interesting for couples who currently maintain separate homes but want to buy their first property together.

What About New Build Properties?

Track Record can potentially be used to purchase a new build house.

However, it isn't currently available at 100% LTV for a new build flat, where Skipton's maximum lending is 95% LTV.

Could Your Mortgage Payment Be Higher Than Your Current Rent?

Potentially, yes.

This is an important feature of Skipton's current affordability calculation.

In some circumstances, Skipton can consider mortgage payments of up to 150% of your average monthly rent over the previous six months.

For example, someone paying an average of £1,000 per month in rent wouldn't necessarily be restricted to a £1,000 monthly mortgage payment purely because of their rental history.

Your income, expenditure, existing financial commitments and overall affordability would still need to support the mortgage.

Is a 100% Mortgage Right for Everyone?

Not necessarily.

Buying without a deposit means you're borrowing the entire value of the property, so it's particularly important to understand the risks.

If property prices were to fall, you could potentially find yourself in negative equity, where your outstanding mortgage is greater than the value of your home.

There may also be other mortgage options available if you have access to a deposit.

This is why it's important to compare the overall mortgage market rather than assuming a 100% mortgage is automatically the best solution.

Been Told You Need a Deposit? It Could Be Worth Checking Again

If you've been renting for years and assumed that buying a property isn't possible because you haven't managed to save a large deposit, don't automatically rule yourself out.

Mortgage criteria continue to change and there are now specialist options designed specifically around the circumstances faced by renters.

Skipton's Track Record Mortgage is a great example.

If you can demonstrate a strong history of paying your rent and household bills, you may be closer to buying your own home than you think.

100% Mortgage Advice in Chester

At Mortgage Support Chester, we can look at your income, rental history, credit commitments and circumstances to establish whether a 100% mortgage could be an option.

We'll also compare this against other first-time buyer mortgages to help establish which route could be most suitable for you.

From working out how much you could borrow and obtaining an Agreement in Principle through to submitting your mortgage application and getting the keys to your new home, we'll guide you through the process.

Currently renting and wondering whether you could buy without a deposit? Get in touch with Mortgage Support Chester today and let's see what's possible.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Mortgage availability and lending criteria are subject to change. The amount you can borrow will depend on your individual circumstances and the lender's affordability assessment.