Mortgage lenders granting 100 per cent mortgages to first time buyers have been branded as "reckless and irresponsible".
The Consumers' Association of Ireland (CAI) slammed mortgage lenders for pushing these mortgages and called for a ban of 100 per cent mortgages .
It pointed out that should the economy take a turn for the worse, first time buyers could lose their homes . They would however still be saddled with mortgage debt owed to the mortgage lender .
When potential first time buyers are saving money towards a deposit on their first home , they are somewhat protected against future events, the consumer body believes.
If interest rates are hiked or should the property market take a dip, first time buyers who borrowed the full value of their properties could be exposed to negative equity, the CAI warned.
In the UK, a number of mortgage lenders offer 100 per cent mortgages to first time buyers .
Leeds Building Society launched a shared ownership mortgage this week that has a maximum loan to value of 100 per cent.
The mortgage offers first time buyers an additional discount of 1.5 per cent for the first three months of the mortgage life.
First time buyers put at risk by mortgage lenders, CAI claims
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First time buyers put at risk by mortgage lenders, CAI claims
Thu, 10 Nov 2005
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