100% Mortgages - Cheap Mortgage Deals

With the difficulty associated with entering in to the housing market being uppermost in many people's minds, the lure of the 100% mortgage has never been so tempting. Many first and second time buyers can afford mortgage repayments but haven't the funds for the deposit. Some lenders cover the price of the property in its entirety plus a bit more to cover fees which include stamp duty, moving costs and fees.

The interest rates for this type of mortgage will not be the cheapest on the market and they can be variable or fixed. Tracker mortgages and discounted rates mortgages are also available and this helps bring down the initial costs.

Most lenders will expect you to take out a Mortgage Indemnity Guarantee (MIG) which is the lenders protection, insuring against you if you should default on the loan, something you are statistically more likely to do. You won't personably reap any benefit from this type of insurance and as it is a percentage of the original mortgage loan it could be an expensive addition.

The advantage of this type of mortgage is that you firstly get onto the ladder and secondly you keep your savings to meet other costs. It pays to avoid a long tie in with this type of mortgage as you may be in a better position to move products with a lower rate within a short space of time.

The disadvantage of this loan is that you will be more vulnerable to fluctuations in the housing market. If you are caught out with negative equity you could be in real trouble if you are forced to sell.