Nervous lenders to cut 100 per cent mortgages - Sindo

[*Nervous lenders to cut 100 per cent mortgages * (Nervous lenders to cut 100 per cent mortgages -

Foolish bankers! Measures like this will only serve to accelerate the slump in the market.

This is the most significant piece of news for awhile.

Oh the poor things, just 95%. It should be 80% or less. Too little too late.

no-one should be expected to save 5% of their house value before buying a property! that would just be madness! All that would do is prove their ability to manage their money and live within their means!

/end sarcasm

Seriously, how did banks ever expect people who needed 100% mortgages to ever be able to deal with rising interest rates? If you finances don’t allow you to save a few grand together how are you going to be able to pay a mortgage? Why could people not accept that they could just not afford a house given their current and the market’s current situation?

will it just be the speculators who can avail of 100% interest only mortgages?

The significance of this move is that First Active was the first lender to offer 100% mortgages to the average punter, back in summer 2005.

the financial instruments that are supposed to keep property prices above 2001 levels are being withdrawn.

[*Permanent TSB cuts down on 100pc mortgages offers * (


Risk aversion leads to risk aversion.

I would disagree with this as the central premise for the lenders in question reducing the range of applicants they are willing to lend to, for a number of reasons.

  1. Neg Eq would affect everyone so therefore if it was the reason then they would remove the 100% mortgage across the board.
  2. Look at the jobs they have decided to continue offering the 100% loan to … income in excess of €75,000 (so twice the average industrial) and civil servants, public servants and professionals. So jobs you most likely can not be sacked from or are unlikey to be outsourced or made redundant from in a recession.
  3. Over the life a mortgage (say 30 ish years) the value of the propery should rise sufficently to remove the impact of any property price “correction”.

I suggest the reason the lenders are removing 100% mortgates to the general population is not a fear of Neg Eq, but a much more worring and wider concern as to where the economy is going in the short to medium term and a resultant loss of jobs in the private sector (or could that be a loss of jobs in the private sector and the resultant direction of the economy in the short to medium term).

Blue Horseshoe

So not so much negative equity, as negative equity for people who might default. The banks dont really care how you pay, as long as you continue to pay. True humanitarians !

see the part "only offer 100% to people earning above 75,000.

Who would fall into that catagory? You would have to assume that if you made in excess of that you would have the sence and ability to scrape 5% together in all honesty.

Unless straight out of med school or something but even still - could you not wait a year?

Most likely counting two incomes to the household.

Blue Horseshoe

This crash is happening a lot faster than I ever thought,the knock on effects are happening just as predicted and just like every other crash,horns are being pulled in everywhere.

If the lenders are expecting mass unemployment in the private sector then who’s going to pay the wages of the public sector?
Which comes first the unemployed or the public sector?
If the government make cutbacks in the public sector to fund the unemployed then they effectivly create more unemployment :cry: .

I can see the Eighties coming back all over again.
Moore McDowell was right “this is one to lose” [the general election 2007].

If you’re not a Public Servant, and you don’t earn more than €75K and you’ve recently bought a 1 bed apartment you’re completely screwed.
If your apartment has 2 or more bedrooms, you’re just a little bit screwed.

Or so goes the expert opinion of PTSB.


RTÉ news report on the lenders tightening restrictions for 100% loans. … 3,null,230

Blue Horseshoe