to wonder why anyone in their right mind would want to take out a 125% mortgage?

[wannaBe]

Obviously these mortgages aren't really as available now as they were a year or so ago.

But earlier I caught the end of a discussion about Northern Rock and how people didn't consider the reality that when they take out a 125% mortgage they are already in negative equity as soon as they move in.

I can kind of see why someone might take out 100% although even that would be risky IMO, but 125%? why why why? Surely if you had that much debt that you needed an extra 25% of the value of your new home to cover it then that's not really the best time to be considering buying a house in the first place?

A stable housing market would be in everyone's best interest. Booms and busts cause so much grief and allow wideboys like Adam Applegarth walk away with millions.

The housing market couldn't have stayed stable because it was completely unstable and over stretched for years.We were offered this northern rock together mortgage and it was very tempting at the time.It seems the banks really thought the ridiculour rises would never end and are now paying for it.

"It seems the banks really thought the ridiculour rises would never end and are now paying for it. "

I don't believe they thought it would never end - they are not that stupid. They knew that as long as hyperinflation of property prices continued, they could make their targets easily and take home massive bonuses. They knew that when it all fell apart they would have lots of ££££££££££ in the bank and could enjoy an early retirment if that suited.

The taxpayer is now paying for the Northern Rock debacle. Not the people who ran it, and certainly not the people who were supposed to be regulating it.

I disagree people cannot afford to pay into pensions with:
house prices being so high
cost of living being so expensive
extortionate fuel duty
high taxes

Don't be so smug about your pension scheme, how safe is it really? Some people have lost it already and you don't actually have any legal entitlement to it.

This what is annoying now, they should let eople who live by the sword, ie up to their eyeballs in debt die by it to and get repossessed, they will learn a lesson that way and won't do it again.
But then when the government is borrowing millions you can't expect Mrs Smith to think debt is a bad idea can you, these clowns will be out at the next election, they know it and therefore don't care any more.

RM1

Sorry if I was being smug
I fully realise that times are tough for a lot of peopl, and I guess I was thinking of friends with well-paid jobs who were buying fancy cars, exotic holidays, electronic gadgets etc rather than looking to the future. As with all things this is partly the governments fault for making pensions so complicated and potentially risky, but I do think there is also a common mindset amongst people who CAN afford pensions that they don't need to think about them.