The British Banks are today beginning to offer customers mortgages at 5 times earnings. Whilst this is an attempt to maintain growth in the housing sector (or more likely to prevent a crash) this is an option to be taken with care.
With property prices at record and rising levels it is becoming more and more difficult for UK citizens to get that foot on the property ladder. The traditional 3 x salary is simply not enough to even cover the deposit in many situations. This new offering allows more and more people to get that mortgage and self-saddle with debt.
The increasing trend for Interest Only Mortgages means people will at the end of the mortgage term need to find the entire capital to pay off the investment. They and the government need to prevent a property slump at any cost to avoid thousand of people finding themselves in negative equity. The solution... increase the problem and let later goverments deal with the fall out.
Take care if selecting this type of mortgage, it may be nice now, but you may regret it in the future.
