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No deposit mortgage ahoy!

We thought we'd seen the last of them, but after becoming as extinct as the Dodo after the credit crunch hit, the 100 percent, no deposit mortgage is slowly re-emerging from the shadows.

Northern Rock has made the bold step of offering the loan. Of course, it's subject to affordability, though we understand that you don't necessarily have to belong to a special income bracket to qualify.

The rub of mortgages that are deposit-based is that buyers often have to rely on their parents being guarantors. To do this they need enough equity in their home or a high income. So if you fall behind with payments, they would be obliged to pay. But if everything went to the wall, this could put your own parents' home at risk, which no one would want to happen.

Other options include shared ownership – if your deposit is less than 5 percent. There are also some housing associations that will let you buy 25 percent of a property and pay rent on the rest. When you can afford to do so you can then make a further staged purchase. This way the deposit needed would be quite a bit smaller.

But for now we think it presages well for the economy and first-time buyers that at least one building society is willing to take the plunge and offer terms that benefit the first-time buyer. It may not be easy to secure this type of mortgage though so act fast while you can.

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