http://business.timesonline.co.uk/to...cle1625924.ece
ALLIANCE & Leicester (A&L) is the latest lender to offer mortgages for more than the value of the property, just as experts warn that one more rise in interest rates could be the final nail in the coffin for the housing boom, writes Clare Francis.
The Bank of England granted borrowers a stay of execution last week when it kept Bank rate on hold at 5.25%, but most analysts think that it will lift rates to 5.5% in the coming months.
Mortgages such as those from Alliance & Leicester have attracted the tag “negative-equity loans” because borrowers instantly owe more than the value of the property, and if prices fell you would become even more indebted. Lenders counter that less than 100% of the loan is usually secured on the property, with the rest in unsecured loans.
A&L’s Plusmortgage range allows you to borrow up to 125% of a property’s value — 95% is secured on the house, with the remainder borrowed as an unsecured loan.
The crash cometh! The crash cometh!
ALLIANCE & Leicester (A&L) is the latest lender to offer mortgages for more than the value of the property, just as experts warn that one more rise in interest rates could be the final nail in the coffin for the housing boom, writes Clare Francis.
The Bank of England granted borrowers a stay of execution last week when it kept Bank rate on hold at 5.25%, but most analysts think that it will lift rates to 5.5% in the coming months.
Mortgages such as those from Alliance & Leicester have attracted the tag “negative-equity loans” because borrowers instantly owe more than the value of the property, and if prices fell you would become even more indebted. Lenders counter that less than 100% of the loan is usually secured on the property, with the rest in unsecured loans.
A&L’s Plusmortgage range allows you to borrow up to 125% of a property’s value — 95% is secured on the house, with the remainder borrowed as an unsecured loan.
The crash cometh! The crash cometh!
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