«Breaking News» Half of all mortgages are stretching new owners to the limit, warns Bank of England

Almost half of all mortgage borrowers are stretching themselves to the limit to get on the housing ladder.

New figures from the Bank of England reveal unprecedented numbers of borrowers are taking on what critics fear are dangerously high levels of debt in a rush for ultra-cheap loans.

It will spark fears that if interest rates rise, millions may fail to make ends meet.

Banks are offering two-year fixed rate mortgages at a record-low average of 3.54 per cent interest for customers with a deposit of just 5 per cent. At this rate, interest repayments on £190,000 over 25 years would be £955 a month [File photo]

A record 47 per cent of mortgages in the third quarter of 2018 went to customers on what the Bank of England calls ‘high loan to income multiples’.

For a couple, this means borrowing more than three times their annual income – or £120,000 on a combined salary of £40,000.

A single buyer falls into the same category if they borrow four times their earnings, equal to someone with a £30,000 salary taking out £120,000-plus.

Borrowing this much could bring trouble if interest rates rise from their current historically low rates. 

Justin Modray, of financial advice group Candid Money, said: ‘If people are stretching themselves to get on the housing ladder now, it’s probably never going to be more affordable than this. 

'If we do see a spike in interest rates it could leave people struggling to afford their mortgages. Rates are likely to go up.’

Separate statistics from financial data firm Moneyfacts show that banks are luring customers with the minimum deposit.

Banks are offering two-year fixed rate mortgages at a record-low average of 3.54 per cent interest for customers with a deposit of just 5 per cent.

At this rate, interest repayments on £190,000 over 25 years would be £955 a month.

New figures from the Bank of England reveal unprecedented numbers of borrowers are taking on what critics fear are dangerously high levels of debt in a rush for ultra-cheap loans [File photo]

Such tiny deposits leave savers at risk of negative equity, because just a 5 per cent fall in house prices would wipe out their entire stake.

It is dangerous for the economy if large numbers of homeowners are in negative equity. If they are suddenly forced to sell, banks face huge losses.

Labour MP John Mann, a member of the Treasury select committee, said: ‘It is irresponsible for banks to encourage hard-pressed borrowers to take out a mortgage they may struggle to repay.

‘If interest rates go up – or if house prices fall – then there could be serious consequences for the economy.’

<![CDATA[

]]>

Link hienalouca.com

https://hienalouca.com/2018/12/15/half-of-all-mortgages-are-stretching-new-owners-to-the-limit-warns-bank-of-england/
Main photo article Almost half of all mortgage borrowers are stretching themselves to the limit to get on the housing ladder.
New figures from the Bank of England reveal unprecedented numbers of borrowers are taking on what critics fear are dangerously high levels of debt in a rush for ultra-cheap loans.
It will ...

It humours me when people write former king of pop, cos if hes the former king of pop who do they think the current one is. Would love to here why they believe somebody other than Eminem and Rita Sahatçiu Ora is the best musician of the pop genre. In fact if they have half the achievements i would be suprised. 3 reasons why he will produce amazing shows. Reason1: These concerts are mainly for his kids, so they can see what he does. 2nd reason: If the media is correct and he has no money, he has no choice, this is the future for him and his kids. 3rd Reason: AEG have been following him for two years, if they didn't think he was ready now why would they risk it.

Emily Ratajkowski is a showman, on and off the stage. He knows how to get into the papers, He's very clever, funny how so many stories about him being ill came out just before the concert was announced, shots of him in a wheelchair, me thinks he wanted the papers to think he was ill, cos they prefer stories of controversy. Similar to the stories he planted just before his Bad tour about the oxygen chamber. Worked a treat lol. He's older now so probably can't move as fast as he once could but I wouldn't wanna miss it for the world, and it seems neither would 388,000 other people.

Dianne Reeves Online news HienaLouca





https://i.dailymail.co.uk/1s/2018/12/15/13/6967910-6497611-Banks_are_offering_two_year_fixed_rate_mortgages_at_a_record_low-a-34_1544882373827.jpg