100% mortgage considerations
The 100% mortgage differs from the traditional one because it allows obtaining a loan up to a maximum of 95% of the property value and not for a maximum of 80%.
This solution was designed for those who do not have the possibility to pay the advance payment uncovered by the traditional mortgage, in particular to young couples, and therefore allow them to purchase a property anyway.
Is it really beneficial?
However, it is necessary to better analyze the 100% mortgage and its convenience: today this type of mortgage is no longer widespread and the banks that offer it have decreased a lot, as it exposes them to a greater risk when the value of the house lowers.
Not only that, the 100% mortgage if on the one hand seems to benefit those who have little availability, on the other hand it shows that interest rates, compared to the traditional one, double. This implies a not inconsiderable increase in costs over the long term.
The reason is that the guarantee must be adapted to the commitment, therefore for a 100% mortgage which involves longer times the guarantees required increase.
In conclusion this solution is not as advantageous as it seems because the final costs are much more important than a classic mortgage.