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Local authority defends decision to offer 100% mortgages
02/04/2009
A local authority has stood behind its decision to offer council tenants and first-time buyers 100 per cent mortgages.
Dundee city council said it intends to go ahead with the initiative, which is set to cost £5.5 million, local paper the Evening Telegraph reports.
Under the scheme, council tenants living in the area will be able to apply for 100 per cent mortgages over a 25-year period.
The maximum mortgage consumers will be able to access will be based on three times their annual income plus their spouse`s annual income where applicable.
Meanwhile, the variable interest rate will start at 3.93 per cent.
A spokesman for the council - which is headquartered in Tayside House, Dundee - defended the scheme, saying it does not pose a risk to local taxpayers.
He stated: "The council will take a standard security over the property and if the borrower fails to pay outstanding mortgage payments, the security will be called up and the property will then be resold on the open market."
