Independent Ireland has called for the return of 100% mortgages.
Such a change would allow banks once again to grant people mortgages without requiring any form of deposit.
The practice was common during the Celtic Tiger but banned after the recession when many people with 100% mortgages defaulted on their payments.
On Lunchtime Live, Independent Ireland TD Ken O’Flynn said it is a policy that “has to be looked at” given the severity of the housing crisis.
“Particularly when you’re out on the streets and you’re meeting people that are paying ridiculous rents of €2,300, €2,500 - which is [more] than a mortgage payment on a three bedroom semi-detached,” he said.
“I think there is an adult conversation to be had and we’re not looking for the return of the days of the Freddie Macs, the Fannie Maes and the disaster that that led to where people earning €30 or €40,000 were getting €400,000 mortgages.”
New apartments in Dublin Docklands Ireland. Image: Ros Drinkwater / Alamy. 03/2009.The Cork North-Central added that if a person can pay a large amount in rent every month, they should be able to obtain a mortgage.
“If you’re able to prove an ability to pay for the past five-years, that you’ve been renting in the private rented market and you’re paying a rent that is €2,000 a month plus, if a mortgage is less than that, I think a bank needs to have a look at that,” he said.
“That’s one way of getting people back into the housing market.”
Newly built residential development and luxury apartments at Cathedral Place, Killarney. Picture by: Alamy.com. Deputy O’Flynn continued that he himself obtained a 100% mortgage.
“I got a mortgage in 2007, in August 2007,” he said.
“We all know what happened in September 2008, Lehman Brothers fell.
“So, I don’t think I would have qualified for a mortgage in October 2008, if I hadn’t received a 100% mortgage at that time.
“We were very fortunate, we were very lucky.”
In response, the Labour Party issued a statement in which they described the idea that 100% mortgages are the solution to the housing crisis as “either stupid or deliberately disingenuous.”
Main image: A property and a calculator. Picture by: Alamy.com.
