Mortgage Indemnity Making A Strong Comeback

anyone who bought a gaff in the 1990s Remembers mortgage indemnity insurance , it disappeared thereafter. Now the insurance companies are skint. :frowning:

I hear its making a strong comeback ‘out there’.

Anyone care to share tales of mortgage indemnity which used to be about .75%-1% upfront on an 70%+ LTV mortgage until the late 1990s

I bought in 1995 :- we were trading up, and were transferring a fair whack of equity to the new house, so the LTV ratio was around 70%.

Our building society manager had to refer to head office to decide if this somewhat risky LTV ratio needed an indemnity policy. He ultimately pulled some strings and got them to agree it didn’t.

Different times.

that was about the margin, you would have had to pay about €500 indemnity on a €50k house if your LTV was over 80% back then.

Once your LTV dropped you didn’t have to pay it at all . 70% LTV was about the limit . Between 70% and 80% was variable. Some insisted and some did not . Over 80% LTV you had to pay it .

The indemnity was an upfront insurance payment on the amount borrowed over 70%-80% BUT you were only insuring the portion between 80% and 90% because the mortgage could not be over 90% back then .

In that case you were paying €500 upfront to insure the €5k tranche between 80% and 90% on a €50k house .

The indemnity was a 10% upfront insurance premium in that case. It was 5% upfront if you were insuring the portion between 70% and 90% .

In other words it was quite a lot , and upfront, and would be €3k nowadays if it continued as was …with the average house at €300k.

I also hear that the indemnities are to be applied to SECOND TIME BUYERS and Movers On as well as first time buyers and that the word is the insurance premium will kick in on the entire mortgage over 60% LTV .

It seems some of our dear bankers had a friendly chat about things in the past week or so , its just that none of them want to jump first because they are afraid that Country Tom and his lads will explode all over them :slight_smile:

Have you heard somewhere that it is making a comeback 2Pack?

I heard that a meeting of mortgage bankers was recently held and that its re-introduction was discussed with a view to possibly phasing it in across all of them simultaneously or in a short period .

Nobody wants to jump first !

Just to remind you of this article in the Tribune back in Feb