THE LAST mainstream lender to offer 100 per cent mortgages to borrowers in general is expected to make a formal announcement in the coming days limiting the product to certain borrowers.

Bank of Scotland (Ireland) has already tightened the criteria on borrowers qualifying for 100 per cent loans, but is shortly expected to withdraw the product from the wider market, limiting it to certain professionals and civil servants with guaranteed income.

A spokesman for the bank said an announcement was "imminent". Brokers are expecting formal notification from the bank in the coming days. The bank was not as active as other residential lenders in the 100 per cent mortgage market.

Irish lenders started withdrawing 100 per cent mortgages generally last year as riskier lending has slowed considerably.

EBS Building Society was one of the first institutions to cut back on such mortgage lending at the end of 2006.

Ulster Bank and First Active withdrew these mortgages to borrowers generally last October, though most mainstream lenders still offer them to certain classes of professionals and civil servants.

Bank of Ireland only provides 100 per cent mortgages to certain professionals and civil servants, while AIB offers the product to professionals on a case-by-case basis.

Permanent TSB suspended 100 per cent mortgages last month. The maximum mortgage available to Permanent TSB borrowers is 92 per cent of the property's value.

No-deposit mortgages are generally regarded as high risk in a declining property market given that new borrowers will fall into negative equity - where the value of the property falls below the value of the mortgage. Moreover, property prices are expected to fall further.

Lenders are seeking deposits of at least 5 per cent and normally 8-10 per cent of the value of the property on new mortgages.

Lending at all financial institutions has slowed sharply over the last six months due to the slowdown in the property market and the higher cost of bank funding.