Nicholas Wallwork
Editor-in-Chief
Staff member
Premium Member
Despite the fact that many regulatory authorities around the world have been looking to ban 95% mortgages they are starting to make a comeback. In many ways it is the array of government financial backing around the world, especially for first-time buyers, which is promoting the return of this risky arrangement.
Without some form of guarantee of funding from your local government, a 95% mortgage puts you at extreme risk from relatively small swings in property markets. In the good times a 95% mortgage could allow you to build up capital in your property and eventually make a good profit. In the bad times a 95% mortgage could be with you for many years to come, possibly leaving you with major debts or paying off a loan on a property which is worth less than your original mortgage.
Without some form of guarantee of funding from your local government, a 95% mortgage puts you at extreme risk from relatively small swings in property markets. In the good times a 95% mortgage could allow you to build up capital in your property and eventually make a good profit. In the bad times a 95% mortgage could be with you for many years to come, possibly leaving you with major debts or paying off a loan on a property which is worth less than your original mortgage.
