Abbey offers five-times-income mortgage

Posted: 01 Nov 2006 11:43:39 GMT

Despondent would-be homeowners have been offered the chance to borrow five times their annual salary by Abbey

Despondent would-be homeowners have been offered the chance to borrow five times their annual salary by Abbey.

Traditionally, four times average annual salary has been the upper limit of mortgage lending offered by lenders.

Debt campaigner the Consumer Credit Counselling Service (CCCS) has warned that the increase could leave borrowers dangerously overexposed, however.

"Well to some people this is going to look like the answer to their prayers, because suddenly they are going to have the opportunity of borrowing the amount they feel they need to borrow," said chair of the CCCS Malcolm Hurlston.

"But it risks taking them into very dangerous territory, not least because interest rates are likely to be going up as well," he told ITN.

"They are going to be very heavily stretched and if their salaries don't go up in the way they think they are going to do, they could find themselves dangerously overstretched."

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