The article doesn’t go into detail about the rest of the lender’s affordability criteria, but this opens the door to allow borrowers to demonstrate that they’ve paid rent and bills on time for years, and for their actual affordability to be considered without an arbitrary cap being placed on their borrowing.
One thing to keep in mind is that, while lifetime fixed mortgages are long overdue in this country, not many people are buying a home they intend to live in forever. Most buyers will upsize/downsize at some point, and may have to stick with this lender in order to borrow again, if other lenders maintain existing borrowing rules. Depending on what happens with interest rates, a lifetime mortgage in 10 years time may not be as attractive as it is today.
I mean that’s a gruesomely high interest rate but to be honest most if not all FTBs are being screwed by rates nearly that high anyway.
“Can you pay your rent which is already hundreds more than the mortgage?” Y/~~N~~
Job done. The criteria they go by seem pretty arbitrary.
Edit: the gruesomely high rate was from an article linked in the existing one where they were after 5+%. I thought that was the rate being asked, my bad
The seems like a PR mortgage scheme ‘helping key workers’ but at seven times salary and an interest rate of 2.99% for life they’re not going to be that attractive.
Keyworkers earning over £25k and other workers earning over £75K only
This is absolutely fine and definitely normal. Certainly nothing to worry about at all.
This is absolutely fine and definitely normal. Certainly nothing to worry about at all.
Sure would be a clever move if anyone was expecting property prices to drop.
I’ll be honest, borrowing 7x income is a bit too rich for my blood but the idea of 5 or so on our joint income (at less predatory rates than these) has got me half dreaming about moving back to my home town now having been effectively priced out (of my neighbourhood anyway) a few years back.
On the other hand, strong 2008 vibes abound. Risky lending in this country, property developers defaulting in China and the possibility of credit crunch 2. Feels like this is the point where road runner has gone over the edge but hasn’t yet looked down.
One thing I don’t get is how this meshes with the “29 buyers for every property” narrative. If that’s the case, why are lenders having to push these risky products?
I still think the smart move for first time buyers might be to just hang on but what do I know?
Sensing similarities here to the 2008 market crash. Almost like bailing out the banks meant they learnt absolutely nothing and they are doing the same thing just under a different title.
The bank says I can’t afford a 1150 a month mortgage, so I have to pay 1400 rent instead.
My first mortgage was 11 x my income at the time. But it was going up quickly. I was very grateful for it.
I miss self certification mortgages.
It’s not the salary multiplier that’s the issue here. Let’s be honest, a £25k salary means a mortgage of around £150-160k after your own deposit, not a huge amount at all.
It’s the stupid interest rate and initial fixed term!
I remember what a fuss they made about lending me 5x just 6 years ago…
Ah yes, relaxing rules on lending in no way will cause problems. Certainly no history of lots of bad loans causing economic trouble for everyone
That’ll keep them slaving for a good few years then. Why don’t they just pay people what they deserve, instead of ripping them off. Just because they get paid a wage, doesn’t mean it’s not slavery. If the cheapest property is Severn time more than there salary, then that are being paid slave wages.
7x wage isn’t a problem as we’re all getting yearly pay rises, right? Right?
Just another wedge in the ever inflating housing bubble crisis.
17 comments
The article doesn’t go into detail about the rest of the lender’s affordability criteria, but this opens the door to allow borrowers to demonstrate that they’ve paid rent and bills on time for years, and for their actual affordability to be considered without an arbitrary cap being placed on their borrowing.
One thing to keep in mind is that, while lifetime fixed mortgages are long overdue in this country, not many people are buying a home they intend to live in forever. Most buyers will upsize/downsize at some point, and may have to stick with this lender in order to borrow again, if other lenders maintain existing borrowing rules. Depending on what happens with interest rates, a lifetime mortgage in 10 years time may not be as attractive as it is today.
I mean that’s a gruesomely high interest rate but to be honest most if not all FTBs are being screwed by rates nearly that high anyway.
“Can you pay your rent which is already hundreds more than the mortgage?” Y/~~N~~
Job done. The criteria they go by seem pretty arbitrary.
Edit: the gruesomely high rate was from an article linked in the existing one where they were after 5+%. I thought that was the rate being asked, my bad
The seems like a PR mortgage scheme ‘helping key workers’ but at seven times salary and an interest rate of 2.99% for life they’re not going to be that attractive.
Keyworkers earning over £25k and other workers earning over £75K only
This is absolutely fine and definitely normal. Certainly nothing to worry about at all.
This is absolutely fine and definitely normal. Certainly nothing to worry about at all.
Sure would be a clever move if anyone was expecting property prices to drop.
I’ll be honest, borrowing 7x income is a bit too rich for my blood but the idea of 5 or so on our joint income (at less predatory rates than these) has got me half dreaming about moving back to my home town now having been effectively priced out (of my neighbourhood anyway) a few years back.
On the other hand, strong 2008 vibes abound. Risky lending in this country, property developers defaulting in China and the possibility of credit crunch 2. Feels like this is the point where road runner has gone over the edge but hasn’t yet looked down.
One thing I don’t get is how this meshes with the “29 buyers for every property” narrative. If that’s the case, why are lenders having to push these risky products?
I still think the smart move for first time buyers might be to just hang on but what do I know?
Sensing similarities here to the 2008 market crash. Almost like bailing out the banks meant they learnt absolutely nothing and they are doing the same thing just under a different title.
The bank says I can’t afford a 1150 a month mortgage, so I have to pay 1400 rent instead.
My first mortgage was 11 x my income at the time. But it was going up quickly. I was very grateful for it.
I miss self certification mortgages.
It’s not the salary multiplier that’s the issue here. Let’s be honest, a £25k salary means a mortgage of around £150-160k after your own deposit, not a huge amount at all.
It’s the stupid interest rate and initial fixed term!
I remember what a fuss they made about lending me 5x just 6 years ago…
Ah yes, relaxing rules on lending in no way will cause problems. Certainly no history of lots of bad loans causing economic trouble for everyone
That’ll keep them slaving for a good few years then. Why don’t they just pay people what they deserve, instead of ripping them off. Just because they get paid a wage, doesn’t mean it’s not slavery. If the cheapest property is Severn time more than there salary, then that are being paid slave wages.
7x wage isn’t a problem as we’re all getting yearly pay rises, right? Right?
Just another wedge in the ever inflating housing bubble crisis.