1 in 4 FTBs opted for 100% mortgage last year

"ONE in four first-time buyers opted for a 100% mortgage last year.
Despite this, the figure is well down on the one in three who chose total financing in 2006 as lenders clamp down on their offerings. "

irishexaminer.com/text/story.asp?j=kfojidsnojeygbid&p=y589577x&n=15895848

The real question is how large a section of the market the FTB has fallen to.

Its a good thing there are no sub-prime borrowers in Ireland, otherwise the market would really be in trouble. :confused:

They were probably on teaser cheaper rates in '06, assuming some are 2 yr fixed, a big reset is forthcoming!

What it doesn’t say - and all those now in negative equity.

Something interesting here, another way to look at how much jumping on the bubble hysteria costs people.

Buying in late 2006/early 2007, the average house value was c. €310k, which would have cost 1,564 per month over 35 years at 5% to repay for those who borrwoed the entire sum.

Now assume that they souls paid a bubble price and they really shoul have not paid more than €200k for the same place (i.e. that price more consistent with long term sustainable yields). Now recalculate the interest rate to see what the implied cost of financing this purchase was.

You get just on 9%. So there is another way of looking at things. You are paying a massive interest charge to secure this asset amidst such irrational competition from other bidders.

And don’t forget that even at a sustained interest rate of 5% they would end up paying back over €700,000 over the lifetime of that mortgage. It’s the new indentured servitude. The bank owns you for your entire life…

Ouch. I hope these people don’t have families & kids depending on them.

In the USA, The share of subprime mortgages to total originations increased from 9% in 1996, to 20% in 2006.

20%, thats 1 in 5.
See the similarity ?

en.wikipedia.org/wiki/2007_Subpr … ial_crisis