What percentage of mortgages issued should require only a 10% deposit?

wotsthat

shortchanged wrote: »

Haven't you heard Graham, there's a 25 year fixed rate mortgage at a rate of 3.69%.

Just go into any bank and ask for it. They're very obliging.

Manchester BS do 5.24% fixed for the term of the mortgage. 80% LTV and £995 fee.

It's been around for a while - don't know how popular it is - looks like a bears dream product.

Percy1983

wotsthat wrote: »

However, it's supportive of the argument that mortgage rationing is preventing significant numbers of people from buying and forcing them to spend similar amounts on rent.

Here we go I am going to throw a thought out there.

People prevent themselves getting mortgages!

Somebody runs up debts, they are preventing themselves getting a mortgage.

Somebody trashes there credit file, they are preventing themselves getting a mortgage.

Somebody doesn't save a deposit, they are preventing themselves getting a mortgage.

Now with all 3 above, they can correct this by changing there own behaviours, hence its an equal playing field for all.

In short you have to play by the rules of the game, if you don't you are out of the game until you play by the rules again.

HAMISH_MCTAVISH

A moderate amount.... 30%

Percy1983 wrote: »

Here we go I am going to throw a thought out there.

People prevent themselves getting mortgages!

Somebody runs up debts, they are preventing themselves getting a mortgage.

Somebody trashes there credit file, they are preventing themselves getting a mortgage.

Somebody doesn't save a deposit, they are preventing themselves getting a mortgage.

Now with all 3 above, they can correct this by changing there own behaviours, hence its an equal playing field for all.

In short you have to play by the rules of the game, if you don't you are out of the game until you play by the rules again.

Percy.... How many times?

If they all had perfect credit and no debt, most would still be refused.

These restrictions are in place to ration credit, to shrink the pool of borrowers to meet the limited pool of funding, and for no other reason.

If everyone suddenly met the criteria, the banks would simply move the goalposts.

grizzly1911

HAMISH_MCTAVISH wrote: »

Percy.... How many times?

If they all had perfect credit and no debt, most would still be refused.

These restrictions are in place to ration credit, to shrink the pool of borrowers to meet the limited pool of funding, and for no other reason.

If everyone suddenly met the criteria, the banks would simply move the goalposts.

So what is the point of FFL?

Graham_Devon

HAMISH_MCTAVISH wrote: »

Percy.... How many times?

If they all had perfect credit and no debt, most would still be refused.

These restrictions are in place to ration credit, to shrink the pool of borrowers to meet the limited pool of funding, and for no other reason.

If everyone suddenly met the criteria, the banks would simply move the goalposts.

You missed "in my opinion" from your post.

Again, what you write simply isn't true.

If it is indeed true, I fail to see why you want more 95% lending. This would require more money to be taken from the pot for each mortgage. Therefore, there would be less mortgages given.

Example.... if I have 200k, I can help 3 people out if they all want 60k. If they all want 80k, I can only help 2 out. So what you wish for would actually create more "rationing" if what you say is true.

grizzly1911

Graham_Devon wrote: »

You missed "in my opinion" from your post.

Again, what you write simply isn't true.

If it is indeed true, I fail to see why you want more 95% lending. This would require more money to be taken from the pot for each mortgage. Therefore, there would be less mortgages given.

Example.... if I have 200k, I can help 3 people out if they all want 60k. If they all want 80k, I can only help 2 out. So what you wish for would actually create more "rationing" if what you say is true.

This effect is multiplied by the need to maintain higher capital reserves against higher LTV lending.

If they want 95% mortgages instead of 60 % they need to hold 6x as much capital -. I think that is what HMT said anyway. Presumably 80/85% sit somewhere between on some form of escalating(?) scale

Graham_Devon

grizzly1911 wrote: »

This effect is multiplied by the need to maintain higher capital reserves against higher LTV lending.

If they want 95% mortgages instead of 60 % they need to hold 6x as much capital -. I think that is what HMT said anyway. Presumably 80/85% sit somewhere between on some form of escalating(?) scale

Very true, though Hamish has already stated, alongside the 95% he doesn't want such capital reserves. He get's around that easily.

grizzly1911

Graham_Devon wrote: »

Very true, though Hamish has already stated, alongside the 95% he doesn't want such capital reserves. He get's around that easily.

Perhaps they should give away a free holiday to vegas with each 95%LTV mortgage too.

Percy1983

HAMISH_MCTAVISH wrote: »

Percy.... How many times?

If they all had perfect credit and no debt, most would still be refused.

These restrictions are in place to ration credit, to shrink the pool of borrowers to meet the limited pool of funding, and for no other reason.

If everyone suddenly met the criteria, the banks would simply move the goalposts.

I agree IF everybody had perfect credit files etc then the flow would be too high and the goal posts would be changed.

But not everybody has got a perfect credit file and a deposit, but everybody is capable of getting them and people are getting there and are getting mortgages.

So right now we have a fair system with a bar anybody can get over with work and time, you want a system where lending is looser which will help many in the short term, but then the bidding wars start, prices start to rise, then people worried about missing the boat start jumping in and make it worse.

Look at it this way if you have a 13 year old and a 23 year old right now, the 13 year old will have the same chance as the current 23 year old in 10 years time.

If we go with your system, the current 23 year old will be fine but the 13 year old will be priced out in 10 years.

Which is fairer, in one they both have a struggle but can do it, in the other one gets it easy and one gets it a lot harder due to being born 10 years to late.

Mr._Pricklepants

Percy1983 wrote: »

Somebody runs up debts, they are preventing themselves getting a mortgage.

That's not necessarily true eh Percy boy?