Gocompare.com comments on Barclays' new 100% mortgage
Commenting on the launch of Barclays' new 100% mortgage, the first from a major provider since the financial crash, Matt Sanders, head of money at Gocompare.com, said: "While Barclays' bold move to bring back 100% mortgages may help those with generous, financially secure parents; it isn't the holy grail that many first-time buyers are hoping for.
"Buyers will still need to find a helper able to stump up 10% of the house purchase price to lock away in a Barclays' savings account for three years. Ultimately, meaning that this is a new mortgage brought to you by Barclays and the Bank of Mum and Dad which still doesn't help the majority buy their first home.
"For those with parents or benefactors able to part with this amount of money for three years, Barclays' new mortgage could well be worth considering, however it's hardly a no-brainer like the government's recently launched Help-to-Buy Isa. It's also worth remembering that the risk is spread across the buyer and the guarantor, so if the mortgage payments aren't met, the guarantor may lose the money held in the savings account.
"Really, Barclays' new product is largely suited for families with moderate to large savings and who don't want or can't wait for the benefit of a Help-to-Buy Isa. However, considering the risk associated with 100% mortgages, and with the mortgage market being particularly competitive at the moment, be sure to weigh up all your options and get fee-free advice before taking the plunge."
Gocompare.com has created an extensive guide on 100% mortgages, including benefits and risks.