BTL Margin calls

[Moscow Mule]

Anyone know if these "margin loans" also apply to conventional mortgages?

Do any conventional mortgages have this type of clause, or is it illegal for consumers, but ok for businesses?

I believe it's a specific clause in BTL mortgage contracts.

Conversely, when I had a 100% mortgage in 2000, the company wrote to me and said they we decreasing the interest they were charging because my LTV had reduced (based on the house price index). Odd, but most welcome.

[BankingContractor]

So its only for BTL mortgages - that's good to know.

Mate here thinks it also applies to some conventional mortgages but I can see there being an outcry if ordinary homeowners were asked for extra cash to top up their LTV ratios, esp if they've maintained their monthly payments. Sounds harsh if that were true.

[BrilloPad]

So its only for BTL mortgages - that's good to know.

Mate here thinks it also applies to some conventional mortgages but I can see there being an outcry if ordinary homeowners were asked for extra cash to top up their LTV ratios, esp if they've maintained their monthly payments. Sounds harsh if that were true.

How would they know on a conventional mortgage?

BTL's have a surveyor revalue I believe.

[bobhope]

It was in my BTL contract (when I used to have one)

[GreenerGrass]

So its only for BTL mortgages - that's good to know.

Mate here thinks it also applies to some conventional mortgages but I can see there being an outcry if ordinary homeowners were asked for extra cash to top up their LTV ratios, esp if they've maintained their monthly payments. Sounds harsh if that were true.

I think Nationwide's system calculates your interest based on current estimated house prices, so if your LTV changes band (from under to over 75% or 90%) they can automatically increase your interest rate (I had assumed LTV was fixed between remortgages).

Anything over 90/95% won't require a margin call, but your interest will increase to the highest rate if not on a fixed rate deal.

[Clippy]

Is this a new thing as I don't recall this happening in the late 90's property downturn.

[Pickle2]

Is this a new thing as I don't recall this happening in the late 90's property downturn.

There was no BTL in the crash of the 90s. It just didnt really exsist, not in the form it does today anyway. BTL is one of the reasons this bubble blew even bigger than the 90s one, and thus why the pop will be bigger too.

Anyone who thinks buying a pile of bricks and sitting on them (whilst getting in rent that doesnt even cover the mortgage for some) is in anyway "investing" was nuts. The whole "business" model was based on cheap credit, which was only a temporary abberation.

Oh no, my mistake, its different this time. A whole new paradigm...