BANKS continued to sell 100pc mortgages throughout last year even though the property market was collapsing and unemployment rates were rocketing.
Up to 5,000 first-time buyers took out the 100pc housing loan, with almost all of them now facing the prospect of being in negative equity, new figures reveal.
Thousands more took out mortgages with loan-to-value ratios of over 95pc — far above the thresholds considered to be prudent bank lending.
The average age of the 100pc mortgage-holders was 31 years, the Department of the Environment’s Housing Bulletin 2008 also reveals.
The loans were taken out for 31-35 years, meaning people will be paying back the cost of their home until they retire.
The housing figures show that lenders approved over 53,000 mortgages worth €14.5bn last year. Forty one per cent were for first-time buyers, and one in four (23pc) of all first-time buyers drew down 100pc loans.
Last night the Financial Regulator defended its actions, saying it had forced banks from 2006 to put aside extra capital to meet possible defaults from 100pc mortgage-holders. Read full article…
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