100 percent mortgage

If you are unable to raise a sufficient deposit for your proposed purchase, then you might be in the position of having to look at a 100 percent mortgage. With these, the banks lend you the full value of your property. Even more dangerously, especially given the fact that house prices have dropped recently, some lenders may lend more than the value of your property.

With these type of mortgages you will be paying a higher interest rate than if you were able to put up a deposit. With these it may be worth within a couple of years looking to remortgage, especially if you have saved up enough to reduce the mortgage by the equivalent of a deposit or the property has increased sufficiently in value. But if property prices continue to fall, this might not be possible so should not be depended on.