What is a Track Record 100% mortgage and how will it work?

It’s an exciting time for renters that are hoping to get onto the property ladder, as a major building society has launched a deposit-free 100% mortgage exclusively for first-time buyers that have been renting for 12 months or more.

Available only through Skipton Building Society, the Track Record mortgage is designed to help sidestep the challenges of saving for a deposit while paying rent. We look at this new mortgage product and answer some of the questions you’re likely to have.

What is a deposit-free 100% mortgage?

A typical mortgage requires a deposit between 5% and 10% of the property value. However the Track Record mortgage requires zero deposit payment, and if eligible, you can apply for 100% of the value of the home you wish to buy.

In return, you must be a first-time buyer and able to demonstrate that you have a reliable ‘track record’ of paying rent and household bills for a minimum of 12 months. So if you’re a current or recent renter who is struggling to save for a deposit, the Track Record mortgage could be an ideal solution for you.

Who will be eligible for a Track Record mortgage?

You may qualify for the deposit-free Track Record mortgage if you are a first-time buyer, aged 21 or over, and you have less than a 5% deposit.

Applicants must have evidence that they have paid at least 12 months’ rent in a row during the last 18 months, as well as all household bills such as utility bills and council tax, and have no missed payments on other financial commitments such as your mobile phone bill over the previous six months.

Can I buy any home and how much could I borrow?

You can buy an existing house, or a new build home with a Track Record mortgage, however new build apartments are not eligible for purchase using this product.

The maximum amount you’re able to borrow with a Track Record mortgage is £600,000. The mortgage rate will be fixed for five years, and overpayments of up to 10% of the original balance each year will be allowed with no Early Repayment Charges (ERCs).

How do you apply for the Track Record mortgage?

Skipton Building Society’s dedicated Track Record mortgage page explains the application process in detail, and has a Track Record Calculator which will give you an initial idea of how much you could borrow to buy your first home with a zero deposit mortgage.

If you intend to buy a new Bellway home, your sales advisor at your chosen development will refer you to the New Homes Mortgage Helpline, who will check your eligibility for a 100% mortgage for you. You can then proceed with reserving your Bellway home, and submitting your Track Record mortgage application.

Important things to consider about a 100% mortgage

Before considering a 100% mortgage, it’s crucial to understand that there is a higher risk of negative equity, which is when you owe more on your mortgage than what your home is worth.

So as with any mortgage product, you should carefully consider whether it is right for you and your circumstances. You may wish to seek professional and impartial advice from an independent mortgage adviser, or a service such as the New Homes Mortgage Helpline if you’re considering a new build home.

For more information on the Track Record mortgage, including eligibility criteria, visit the Skipton Building Society website.