Lender Skipton's recent launch of a 100% mortgage targeted at first-time buyers has raised alarms among financial advisers, with six in ten expressing worries about a

potential "repayment crisis." While these mortgages offer an opportunity for buyers to enter the property market without the need for upfront savings, they also expose borrowers to the risk of negative equity if house prices decline. This concern was echoed by 63% of mortgage-focused advisers surveyed by Opinium.

While acknowledging the potential benefits of 100% mortgages in helping first-time buyers, Alexa Nightingale, Head of Financial Services Research at Opinium, emphasized the importance of considering the associated risks. The cautionary remarks from experts like Andrew Bailey, Governor of the Bank of England, regarding the need for caution with such mortgage deals highlight the need for careful consideration.

The survey revealed that two-thirds of financial advisers expressed concerns about the risks associated with 100% mortgages. Additionally, 61% worried that these mortgages could trigger a "repayment crisis" if interest rates were to rise. With interest rates already on the upswing, following the announcement of unfunded tax cuts, experts fear that mortgage rates could also increase. Currently, two-year fixed mortgage rates average at 5.32% and five-year fixed rates stand at 5.03%.

Given the potential combination of rising interest rates, falling house prices, and inflationary pressures, experts remain skeptical about the viability of 100% mortgages and their associated risks.