Borrower beware

IT’s NOT OFTEN that the Sun and the Guardian agree on anything but the Abbey’s five-times earnings mortgage offer has got them both in sceptical mood this morning.

A leader in the Guardian concludes:

‘For a decade, property ownership has seemed a risk-free way for people to get rich. But buyers should remember that the most generous lenders have a habit of turning nasty when the monthly mortgage payment is missed.’

Ian King in The Sun predicts strong demand for the new product and says other lenders are likely to follow suit, with some offering mortgages worth 25% more than the value of their home. But he also warns us to ‘beware of the more-gage’ at a time when interest rates are expected to rise.

Still, anyone in real trouble can simply turn to the adverts that helpfully run alongside his story on the web. ‘Debtbuster Mortgage’ anyone? If you have ‘Bad credit? Get an instant personal loan online’.

LATEST: The Yorkshire Building Society points out its Accord Mortgages subsidiary has been offering five-times salary mortgages since February. Go here for details.