Investing.com – Barclays (LON:BARC) launched the first “no-money down” mortgage since the financial crisis, allowing borrowers to get a loan for the full value of their future home.
The bank took a step towards riskier lending practices by not requiring would-be home buyers to put down a deposit on the purchase of their new property.
Most British banks require a 5% to 10% payment in order to grant a loan.
Previously, Barclays had required a 5% deposit, along with the opening of a savings account with a cash equivalent of 10% provided as a guarantee and often supplied by a borrower’s parents.
The new no-money down mortgage still required the 10% guarantee, but did away the need for a 5% deposit in the purchase of the home.
Prior to the 2007 financial crisis, some British banks did offer to lend home-buyers 125% the value of the property.