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

HAMISH_MCTAVISH

A moderate amount.... 30%

Graham_Devon wrote: »

We don't have a set number of 90% mortgages now, never have and never will.

We've always had "unlimited" numbers of 90% mortgages. There is no numerical limit.

There most certainly is a limit now, and has been since the credit crunch started.

"Credit crunch".

The clue is in the name....

zagfles

IveSeenTheLight wrote: »

I'm sorry, this does not seem to address the questions I asked?

[/I]

I don't care about the answers to your questions, because they are irrelavant. The point is that a sustained downturn could result in falling prices and rising unemployment, which could result in lots of people in negative equity who can't afford to pay their mortgage. The fact it hasn't happened yet in the UK is not relevant, it has happened in the US, it could happen here. That's why the banks are rightly wary.

I remember some numpty telling me in the late 80's that house prices would never go down, just because they hadn't gone down in living memory :rotfl:

james_toney

Most.... 75%

HAMISH_MCTAVISH wrote: »

Yes, it's very strange he keeps ignoring a simple question like that.

Is he happy with unlimited 90% mortgages?

Hamish would you be happy with unlimited 90% mortgages ?

I would

N1AK

A few..... 15%

IveSeenTheLight wrote: »

In contexst with the post it was replying to, I think it was a relevant question

Where as I don't believe it is. I wouldn't based my predictions on what would happen in future if employment fell and house prices fell on what has happened on the previous 6 years.

The smoking analogy was to highlight the risk of automatically using historical data to predict the future. It has no relevance to zagfles original post, nor was it intended to, as it was related to your question.

zagfles

HAMISH_MCTAVISH wrote: »

Completely and utterly wrong.

If a million people with perfect credit scores showed up at banks this year with a 10% deposit, they would have to reject almost all of them.

Banks are not rejecting up to 90% of FTB applications for a 10% deposit mortgage for fun... They're doing so because the new capital withholding rules combined with dysfunctional wholesale lending markets mean they have only tiny amounts to lend at higher LTV-s.

Maybe we need a new type of mortgage lender in the market. A bank or organisation which under no circumstances will be bailed out, which does not provide the £85k deposit protection for savers, which does not benefit from any govt scheme to encourage lending, and which is not subject to capital witholding rules. A completely stand-alone free market bank.

Let that bank attract deposits from savers under those criteria, it would clearly have to pay a higher interest rate to attract savers, and let it lend 90% mortgages, even 100%. The market will decide what the interest rate will be. Wonder what they'd decide on, perhaps similar to junk bonds?

Percy1983

HAMISH_MCTAVISH wrote: »

Completely and utterly wrong.

If a million people with perfect credit scores showed up at banks this year with a 10% deposit, they would have to reject almost all of them.

Banks are not rejecting up to 90% of FTB applications for a 10% deposit mortgage for fun... They're doing so because the new capital withholding rules combined with dysfunctional wholesale lending markets mean they have only tiny amounts to lend at higher LTV-s.

Ok so the funding pot is limited at all levels then you would agree?

So on that basis you would set your lending criteria at levels which stem the flow to a level which can be sustained, which would then lead to making higher risk loans harder to get/less desirable.

I really don't see where you are going with this apart from you want anybody who turns up at the bank to get a loan to fuel your own selfish desire for hpi.

N1AK

A few..... 15%

zagfles wrote: »

Maybe we need a new type of mortgage lender in the market. A bank or organisation which under no circumstances will be bailed out, which does not provide the £85k deposit protection for savers, which does not benefit from any govt scheme to encourage lending, and which is not subject to capital witholding rules. A completely stand-alone free market bank.

The issue with that would be that many people who did not fully understand the risks would be attracted by the higher rates. If they invest, when more informed people would say they should not, and end up destitute then it is the tax payer who picks up the pieces.

HAMISH_MCTAVISH

A moderate amount.... 30%

Percy1983 wrote: »

Ok so the funding pot is limited at all levels then you would agree?

So on that basis you would set your lending criteria at levels which stem the flow to a level which can be sustained, which would then lead to making higher risk loans harder to get/less desirable.

You're obviously confused.

Historically normal, low risk, prudent, and sensible lending such as with a 5% or 10% deposit should be encouraged and availability should increase massively from todays abnormally low, restricted, rationed levels.

Historically abnormal, and higher risk loans, such as 100%, 125%, I/O with no repayment vehicle, etc, should be discouraged through pricing for higher risk.

I really don't see where you are going with this apart from you want anybody who turns up at the bank to get a loan to fuel your own selfish desire for hpi.

And I really don't see where you're going with this other than to prevent millions of people form buying houses, and forcing an entire generation to enrich their landlords.

Mr._Pricklepants

HAMISH_MCTAVISH wrote: »

And I really don't see where you're going with this other than to prevent millions of people form buying houses, and forcing an entire generation to enrich their landlords.

How ironic to see our dear Percy assume the "I'm allright Jack, pull the ladder up" position when he only got into a home buying position thanks to sharing his personal debts with his other half.

Percy1983

HAMISH_MCTAVISH wrote: »

And I really don't see where you're going with this other than to prevent millions of people form buying houses, and forcing an entire generation to enrich their landlords.

Lets be honest now way is perfect but Iw ant the lessor of 2 evils.

You want a system where the first to bank and say 'show me me money' get it. This makes a system where the first there do best as prices rocket as the free for all bidding war takes place.

I prefer the current system where, yes as you say some are pushed into enriching landlords a little longer but the goal is still attainable as prices aren't shooting out of reach. The ability to buy is based on each individuals actions, the bar maybe high but is open to all, those with poor credit files and improve them and those with goods ones get the first bite of the cherry.

I am happy to leave it there and agree to disagree if you admit your only interest is further hpi and nothing to do with concern for those who can't buy.