Small deposit mortgages are not necessarily a bad thing.
The 95 per cent mortgage has a bad reputation for its role in Britain’s property boom of the 2000s and is taken as a marker of those lax lending days.
Yet, dig into the figures and you will find that actually first-time buyers put down bigger deposits on average between the millennium and 2007, than they did through the 1980s.
House price growth has stalled and Nationwide’s index shows property values down on last summer, the housing market is at a junction
What concerns me is that the property market is at a junction.
House prices have risen about as far as they can based on people’s current earnings and ability to borrow money.
Banks and building societies are keen to make money, however, and bigger mortgages and rising house prices equal greater profits.
I’m intrigued to see whether this means that we start to see mortgage lending standards slide.
Lenders must assess borrowers on affordability at the moment, ie whether they can meet monthly payments, and that’s led to longer and longer mortgage terms, will it also lead to the return of interest-only?
Listen to our podcast: This week what would you do with a big win?
On this episode of the This is Money podcast, Simon Lambert, Lee Boyce and Georgie Frost look at what it means to win big.
They discuss what they do with a £1million Premium Bond prize and also look at what might be some of the first things you need to think about if you’re lucky enough to come into some cash?
Meanwhile, when it comes to gifting money to children, should it go towards their student loan, help with a house deposit, put in a pension or help them get involved in investing?
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