More home buyers can now apply for no down payment mortgages from Skipton Building Society

Former homeowners turned renters can now also get a boost up the real estate ladder as the Skipton Building Society expands who can apply for its zero-deposit mortgage.

The mutual is expanding the pool of aspiring homeowners who can apply for a Track Record mortgage, to support more “captive renters.”

The mortgage deal was launched earlier in May and was aimed at first-time buyers. Since then, Skipton says he has received more than £40 million in mortgage applications.

More than half of applicants have purchased terraced houses to date and nearly a fifth of applicants are based in Scotland, the association said.

It says today’s move to allow more potential buyers to sign up could potentially help people who have previously moved out of their own homes back into the rental sector.

For example, this may be related to factors such as a divorce or the need to move.

Skipton says people who used to be homeowners but haven’t owned a home in the last three years can now also apply for the deal, as well as first-time buyers.

The Track record mortgage is a five-year, free, fixed-income product with an interest rate of 6.19 percent, over a maximum term of 35 years.

According to data from Moneyfacts, the average five-year fixed-term mortgage in the market is also 6.19 percent, although this is true for all deposit sizes.

Charlotte Harrison, CEO of home finance at Skipton, said: ‘Following the successful launch of our Track Record mortgage for starters, we have been actively reviewing the product and listening to customer feedback, focusing on how we can develop it further help more people free themselves from being trapped in captive rental cycles.

‘People trapped in the rented sector is one of the biggest housing problems in Britain and has a huge impact on the fabric of our society.

“As rising rents and cost-of-living pressures further impact people’s ability to save for a home security, it becomes almost impossible for people to get up the real estate ladder.

“By expanding our lending criteria, we can help more people get the keys to their own home.”

When the deal went live in May, the association made it generally available to first-time buyers across the UK.

Renters age 21 and older may be able to take out a mortgage at 95 to 100 percent of the value of the property they want to buy.

In return, they will need to demonstrate a strong track record of paying their rent, with proof of a minimum of 12 months of rental history.

This proof can be provided, for example, via bank statements or a letter from a registered rental agent.

Skipton said that, as a responsible lender, she ensures that the monthly mortgage payment for each applicant does not exceed the average of the past six months’ rent that they have paid.

For example, a tenant who has paid an average of $800 per month for the past six months would have a maximum monthly mortgage payment of $800.

In the terms of the Track Record mortgage agreement on its website, Skipton says it does not provide loans for new-build apartments, but it does accept applications for new-build homes.