The `monster´ mortgage is back - is it a risk?
(The Guardian Money News)

A leading bank has begun offering first-time buyers loans of 5.5 times their income - and they only need a tiny depositAfter the financial crash struck in 2008, loans to first-time buyers were immediately slashed. There would be no more jumbo-sized mortgages of five times income or more. There would be no more 95% or 100% loans. Buyers would need a large deposit. But this week Clydesdale Bank said it will grant first-time buyers mortgages of 5.5 times a borrower´s income and lend up to £600,000 - and the buyer only needs a 5% deposit.The product has sent shockwaves through the mortgage industry, which was plagued with accusations before the crash about `reckless lending`. In November 2006, Abbey (now Santander) began offering mortgages of five times salary. Vince Cable, then the Liberal Democrats´ Treasury spokesman, called the news `very alarming`, adding that it was `likely that these irresponsible lending practices will lead to financial disaster for many people`. Continue reading...