HSBC calls end of crash, increases 90% mortgage funding

Thrugelmir

Conrad wrote: »

, so UK lending will draw funds from far and wide.

I'd be interested to know where from?

As international banks are withdrawing from the UK to their own domestic markets, and the UK banks are being propped up by Government initiatives already due to lack of wholesale funding.

StevieJ

doire wrote: »

The biggest boom in house prices fuelled by liar loans and banks taking huge risks is then followed by a crash. And it only takes a 12 or 18 months to sort out :rolleyes:

Yeah right

Perhaps it wan't as big as you thought

StevieJ

Thrugelmir wrote: »

I'd be interested to know where from?

As international banks are withdrawing from the UK to their own domestic markets, and the UK banks are being propped up by Government initiatives already due to lack of wholesale funding.

The Chinese have already started to dip a toe in the water.

chucky

Thrugelmir wrote: »

Major lenders seem to reducing loan exposure in general by reducing multiples.

So although 90% sounds great.

A year ago on a £40k salary times 5 salary at 90% LTV = £180k

Today on a £40k salary times 3.5 salary at 90% LTV = £126k.

that sounds pretty good for an FTB... why didn't you do it on joint income :rolleyes:

how about

on a two £40k salary at just 3 times salary at 90% LTV = £240 plus a 10% deposit = property around £264k on 90% mortgage...

and when you talk about an FTB... will they be buying an average house?
you seem to be comparing and FTB with average house prices.
an FTB is not an average home buyer...

you're comparing oranges and apples... that isn't a very realistic or even balanced viewpoint :rolleyes:

Graham_Devon

chucky wrote: »

you're comparing oranges and apples... that isn't a very realistic or even balanced viewpoint :rolleyes:

Says the person who has just used 2x 40k salaries as an example of affordability.

Entertainer

From a purely business perspective I would say this a good decision from a bank who has a better capital position than most and wants to make money. Given the buffer of a 10% deposit, lower salary multiples and presumably some capital repayment, the risk to them of defaults is low enough to make this a good investment. Whether these moves are a good idea is another matter.

I'm interested to know from Mctavish whether he thinks there is any limit to this. Would 100% mortgages be fine by him? 7x salary multiples? Interest only for everybody? Is the nation ready again to warmly embrace mortgages where repayment of principal is forgotten and you rely on inflation to build value?

Of course the downside to this is what it has always been- you addict the nation to permanently low interest rates which we know from experience don't remain low for ever. And you send capital values to unsustainable levels.

chucky

Graham_Devon wrote: »

Says the person who has just used 2x 40k salaries as an example of affordability.

it's exactly the same salary that Thruglmeir gave...

but anyway here's a Graham Devon (a very simple example) friendly one for you :T
on a joint £60k salary at just 3 times salary at 90% LTV = £180 plus a 10% deposit = property around £200k on 90% mortgage... that's still more than the price of an average home :rolleyes:

what's your point? actually do you ever have a point....

Frozenace

I read somewhere that it takes 3-4 times the capital for a bank to fund a 90% mortgage than a 60% one (can't remember where).

If that's true then they would have to increase their % just to make it viable.

Graham_Devon

chucky wrote: »

it's exactly the same salary that Thruglmeir gave...

but anyway here's a Graham Devon (a very simple example) friendly one for you :T
on a joint £60k salary at just 3 times salary at 90% LTV = £180 plus a 10% deposit = property around £200k on 90% mortgage... that's still more than the price of an average home :rolleyes:

what's your point? actually do you ever have a point....

Whats your point?

You keep using really high income figures to make it.

Thats NOT a normal family income.

It may be a normal professional couple in decent jobs income. But not a normal family income. Families far outweight professional couples with no intention of kids.

inspector_monkfish

chucky wrote: »

that sounds pretty good for an FTB... why didn't you do it on joint income :rolleyes:

how about

on a two £40k salary at just 3 times salary at 90% LTV = £240 plus a 10% deposit = property around £264k on 90% mortgage...

and when you talk about an FTB... will they be buying an average house?
you seem to be comparing and FTB with average house prices.
an FTB is not an average home buyer...

you're comparing oranges and apples... that isn't a very realistic or even balanced viewpoint :rolleyes:

dont think you'll find many FTB couples that are both on £40k