Analysis: longer mortgages would unlock the bind many renters find themselves in but could be expensiveA 50-year home loan might sound depressing to some, but perhaps not if the alternative is never being able to buy a property. Long-term fixed-rate mortgages are an emerging financial product that should in theory allow first-time buyers who are currently priced out of the market to get on the housing ladder.By spreading the repayments over longer – the average for mortgages taken out this year is 29 years – buyers should be able to borrow up to eight times their income, rather than the current average of 3.2 times, say potential providers. The loans would be backed by borrowing from pension funds and insurance companies rather than against less stable consumer deposits, to satisfy the Bank of England’s prudential requirement. Continue reading…
Source : theguardian.com
Read more…Fifty-year home loans would get more on ladder but come with risks
