Santander has launched a mortgage offering first-time buyers the chance to borrow up to 98% of a property's value, but with strict rules in place that could exclude many potential customers.
The five-year fixed-rate loan requires a minimum deposit of £10,000 and a maximum loan of £500,000. While this is more generous than traditional mortgage offers, which typically have a 95% borrowing limit, the restrictions on who can qualify are significant.
For example, flats are excluded from the deal, as well as new-build homes and properties in Northern Ireland. Self-employed buyers also do not qualify, unless they are applying jointly with another first-time buyer. This could make it difficult for those who own their own businesses to get a foothold on the property ladder.
Furthermore, the maximum loan of £500,000 may be out of reach for many potential buyers in areas where house prices are high, such as London. The average house price in the city was £539,000 in December, meaning that even with an 98% mortgage, borrowers would still need to earn a substantial amount to afford a property.
Experts warn that while Santander's move may help some first-time buyers achieve their dream of home ownership, it could also limit how widely the product is adopted. Paula Higgins, chief executive of the HomeOwners Alliance, noted that the restrictions raise real questions about how many first-time buyers can realistically benefit from this deal.
The City regulator and the Bank of England have been working to encourage banks to respond to changes in how people live and work, and it appears that Santander's move is a response to these efforts. However, while some mortgage brokers see this as a bold and significant move, others are more cautious about its potential impact.
Overall, while Santander's 98% mortgage deal may offer hope for some first-time buyers, it also raises concerns about the availability of affordable mortgages in certain areas and the restrictions on who can qualify.
The five-year fixed-rate loan requires a minimum deposit of £10,000 and a maximum loan of £500,000. While this is more generous than traditional mortgage offers, which typically have a 95% borrowing limit, the restrictions on who can qualify are significant.
For example, flats are excluded from the deal, as well as new-build homes and properties in Northern Ireland. Self-employed buyers also do not qualify, unless they are applying jointly with another first-time buyer. This could make it difficult for those who own their own businesses to get a foothold on the property ladder.
Furthermore, the maximum loan of £500,000 may be out of reach for many potential buyers in areas where house prices are high, such as London. The average house price in the city was £539,000 in December, meaning that even with an 98% mortgage, borrowers would still need to earn a substantial amount to afford a property.
Experts warn that while Santander's move may help some first-time buyers achieve their dream of home ownership, it could also limit how widely the product is adopted. Paula Higgins, chief executive of the HomeOwners Alliance, noted that the restrictions raise real questions about how many first-time buyers can realistically benefit from this deal.
The City regulator and the Bank of England have been working to encourage banks to respond to changes in how people live and work, and it appears that Santander's move is a response to these efforts. However, while some mortgage brokers see this as a bold and significant move, others are more cautious about its potential impact.
Overall, while Santander's 98% mortgage deal may offer hope for some first-time buyers, it also raises concerns about the availability of affordable mortgages in certain areas and the restrictions on who can qualify.
... £10k deposit? That's still a pretty penny to put down on a house, especially when you're just starting out. And £500k loan limit? That's like a stretch for many people in areas like London where the prices are already sky-high 
. Plus, what about all the other restrictions on who can qualify? Self-employed folks have it tough enough without being shut out of this deal 
. I think Santander is trying to help some first-time buyers, but I'm not convinced it's going to make a huge difference in the grand scheme of things...
I think this is a great move by Santander, but let's be real, it might not be available to everyone 
. I mean, £10k deposit? That's a big ask for some people, especially if they're self-employed or buying in super pricey areas like London 
. We need more initiatives like this to make homeownership more accessible! 
, but like, there are some major caveats that need to be considered 
. Flats and new-build homes aren't even in the mix, which is a bummer for some people 
. And self-employed buyers are basically out of luck unless they find another buyer to co-sign with... that's a huge hurdle to jump over 
.
. The average house price is £539k and a 98% mortgage would still require a ton of income just to make ends meet 
. And what about those self-employed folks trying to get on the property ladder? It's like they're being told to find a co-buyer just to qualify 
.
. The City regulator and Bank of England are pushing banks to adapt, and this move is definitely a step in the right direction 
. But at the same time, I worry that some people might not be able to take advantage of it due to the high house prices in areas like London 
... flats are excluded which is pretty harsh 
... self-employed people having to team up with someone else? no thanks 
. And what about those in Northern Ireland? Are they just being left out because of some arbitrary reason?
.
gotta apply w/ partner or whats good