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Unbelievable 40y mortgage


spygirl
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Following on from Habitos 40y fix, where I've not seen any blurb..... comes Kensingtons -

https://amp.theguardian.com/money/2021/nov/27/homebuyers-offered-40-year-fixed-rate-mortgage-by-uk-lender

The Kensington deal rates on a 60% loan-to-value (LTV) mortgage start at 2.83% for a 15-year term and go up to 3.34% for a 40-year fix.

The loan is available up to 95% LTV for new purchases or 85% for remortgages. Rates are higher on the larger LTVs.

...

No early repayment charges apply if you are moving home, selling, or a critical illness or death occurs

Kensington are a bank. Any money provided has to be raised.

Iirc they are partnered with a life co.

Now the buts I cannot wirk out is the fixes over 5-10 years and the no repayment charges, which is the biggy.

To raise miney for 40y of fixed mortgage youd need a massive pool of fixed debt. And youd need high exit penalties.

My guess is a fix for longer than 5-10 just doesnt exist and it's nothing more than a scam to get free ad space.

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It matters not now, the further we delve into clown world gives further weight to what I said here…

There will be no ‘correction’, it’s too big will effect too many to keep the economy afloat on top of Covid restrictions that are going nowhere with the governments now being very quick off the mark with this new variant.

https://www.telegraph.co.uk/global-health/science-and-disease/new-vaccine-needed-omicron-variant-long-will-take-arrive/

The government and media are almost as coercing to get in mortgage debt at the top of the cycle as they are around vaccinations.

We go straight to the greatest crash since 1920’s which guarantees the debt laden servitude of the masses to the government, asset forfeiture, Digital IDs and UBI from here.

 

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Theres not enough mortgaged houses for the market to crash.

Equally, there's not enough mortgage buyer to clear the market.

It's looking likely that rates have to move towards 4% in a short time frame.

 

 

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26 minutes ago, spygirl said:

Theres not enough mortgaged houses for the market to crash.

Surely, as transactions fall the number of houses required to crash the market also declines. If current trends in cratering transactions continue that threshold could get very low indeed.

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13 minutes ago, Axeman123 said:

Surely, as transactions fall the number of houses required to crash the market also declines. If current trends in cratering transactions continue that threshold could get very low indeed.

Low IRs support low transactions  - even the leveraged can afford to not sell.

However the stock of unsold houses build up over the years, overwhelming the numbers of buyers.

I'm not sure exactly how this will play out. It wont be good for house sellers.

 

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If no early redemption fees it seems like a good deal, a hedge against interest rates rising sharply.

Of course the value of the property borrowed against would fall fast if rates went to 5%. But then so would all the others, making trading to something else cheaper.

If you had very little skin in the game ie high LTV a capital loss would not be serious.

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42 minutes ago, Boon said:

If no early redemption fees it seems like a good deal, a hedge against interest rates rising sharply.

Of course the value of the property borrowed against would fall fast if rates went to 5%. But then so would all the others, making trading to something else cheaper.

If you had very little skin in the game ie high LTV a capital loss would not be serious.

The no redemption make it a good deal for the mortgage owner.

A terrible deal for the finance co - Kensington are not bank, so will need to raise all the money as bonds.

This i why I think the mortgage does not exist.

The treasury side of it cannot be done.

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24 minutes ago, spygirl said:

The no redemption make it a good deal for the mortgage owner.

A terrible deal for the finance co - Kensington are not bank, so will need to raise all the money as bonds.

This i why I think the mortgage does not exist.

The treasury side of it cannot be done.

What is to stop them doing what all the back-bedroom energy suppliers did, ie selling long-term fixes and borrowing short-term? As a non-bank could they be unhedged, and dependent on rolling over short-term bonds?

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7 minutes ago, Axeman123 said:

What is to stop them doing what all the back-bedroom energy suppliers did, ie selling long-term fixes and borrowing short-term? As a non-bank could they be unhedged, and dependent on rolling over short-term bonds?

Their solvency.

They may be unregulated, non banks.

But the BoE can still shut them down.

Again, this sounds like a BS claim.

Id bet 99.9999% of fixes they sell  are 10 years or less.

And they wont sell many. And theyll be matched with the Life Co ER products.

 

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10 hours ago, spygirl said:

The no redemption make it a good deal for the mortgage owner.

A terrible deal for the finance co - Kensington are not bank, so will need to raise all the money as bonds.

This i why I think the mortgage does not exist.

The treasury side of it cannot be done.

Could this be like the energy companies. They go bust and the low interest rate is then not honoured by the govt or new bank?

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11 hours ago, RJT1979 said:

Could this be like the energy companies. They go bust and the low interest rate is then not honoured by the govt or new bank?

 

That sounds the likeliest outcome.

I expect that buried away within the detail of the contracts there is a clause that in the event of lender insolvency the mortgage becomes immediately repayable in full.

Any other lender choosing to take it on will then set their own terms.

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I think this is the one - 

https://suite.endole.co.uk/insight/company/03049877-kensington-mortgage-company-limited

Kensington is used a lot in various finco names.

You can see IO BTL/Browns boom writ large in their finances.

Collapses after 2012, which is when MMR rules started to be rolled out.

They turnover 65m. They are a large mortgage brokers, thats all. Net assets of 36m.

Freddy MAC, whish is the US body that offers long fixes at low rates, no cost to change has - 

Total assets: US$2.063 trillion (2018)
Revenue: US$75.125 billion (2020)

 

 

 

 

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Looking at their finances, they are on the slide again and have been for a couple of years.

Id hazard that theyve not been able to compete with HSBC and cant lend to the people theyve lent to before.

 

 

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  • 2 weeks later...

Still pondering this.

Look at Habito.

Surely if they are funding mortgages then their balance should be expanding?

Even if they are not on their books, surely there should be a flood of people takign those mortgages out. Maybe not the 40y, but 10-15y would be good.

https://suite.endole.co.uk/insight/company/12294626-habito-go-funding-no-1-ltd

Inactive.

https://suite.endole.co.uk/insight/company/09384953-hey-habito-ltd

The company is shrinking - 3/4 down - not growing.

image.png.46fa292afae08e086dfc0cad56fbaddb.png

 

Then theres the CEO/drerctor

HABITO_Dan_Hegarty_338+copy+(2).jpg%3Fv1

Dan Hegarty, founder and CEO of digital broker and lender Habito

 

And - 

 

 

https://dh-habito.medium.com/

Daniel Hegarty

Founder & CEO of habito. Maker of things. White noise enthusiast.

 

Tghast great.

But the director./CEO is recorded as - 

PRESSBURG, Daniel Peter

Correspondence address
Throgmorton Uk Ltd, Reading 4th Floor, Reading Bridge House, George Street, Reading, Berkshire, England, RG1 8LS
Role ACTIVE
Director
Date of birth
February 1982
Appointed on
12 January 2015
Nationality
British
Country of residence
England
Occupation
Ceo

 

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https://www.bbc.co.uk/news/business-40962875

The spark of the idea for online mortgage brokerage Habito came from his attempt to buy his first home. Daniel nearly lost out on the property after a series of mistakes by his mortgage broker.

He says they put down his wife's name, twice, alongside his own name. This held up the process for 10 days, and when the form was corrected the third, extra name that was removed was not the duplicated wife, but his own.

Which of his names?

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At Wonga he discovered that he did, in fact, have another string to his bow other than music.

"It quite quickly emerged I was a massive geek," he says. "I'd spend my evenings reading text books on pure maths, and doing online courses from Stanford University [in California].

"Within a couple of months I was running a lot of the tech stuff."

Yes...

Maths wont help you much with software.

Pure maths wont help tyou with much.

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Habito are losing money, that's why their assets are shrinking. 

But that is common for these businesses, most likely they will have gotten another fundraise this year.

Also the account year end was 31 Jan 2020, so pretty much pre-dates Covid. 

Seems a very long way to profitability from here, if ever.

 

 

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15 hours ago, Boon said:

Habito are losing money, that's why their assets are shrinking. 

But that is common for these businesses, most likely they will have gotten another fundraise this year.

Also the account year end was 31 Jan 2020, so pretty much pre-dates Covid. 

Seems a very long way to profitability from here, if ever.

 

 

Its meant to be a finsec start up.

It ought to be getting funding - if its viable or all thats madeout.

It looks like a crap mortgage broker who are failing to broker much. And the CEO is using 2 different surnames.

I doubt is sold a singel Habito one or whatever the mortgage is called. I reckon its all bullshit in a scam attempt to get free media.

 

 

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Well even worse, the taxpayer are also investors.

If you add that £35m to the cash that means they have c.£40m to play with, so another 2 years before having to go back.

I think a lot of these investments on their own are can-kicking, as if they don't fund then either the business is bust. Or they get funding from somewhere else and the existing investors are diluted. 

For funds with billions this kind of money is negligible, a bit like me buying Great Panther or something, hoping but not expecting anything.

Good analogy I can think is Ratesetter, supposedly meant to be disruptive, burned through loads of cash with the goal of a stock market listing. Ended up being sold for £12m to Metro Bank.

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1 hour ago, HousePriceMania said:

Again - 

Mortgage lenders are preparing to launch a raft of new products with lower hurdles for borrowers and fixed-rate terms of up to 50 years, The Mail on Sunday has learned. 

The Bank of England is widely expected to dilute mortgage rules as soon as tomorrow. The loosening of affordability restrictions will make it easier for borrowers to take out larger home loans. 

The move would allow buyers to borrow more at an earlier stage, opening the market up to much younger buyers. But it is also likely to add fuel to house prices which are already soaring to record highs.

 

More lobbying BS. Appeared in various forms the last 2 weeks.

What exactly is the BoE proposing to do?

Lower the stress rate form 6%?

Is likely that rates are going up a lot next year.

Its possible the SVRs will be in 6%.

Once you get beyond 25 years, the money you save by extending the repayment terms shrinks to fuckall - the mortgage becomes just all IRs and ends up costing a fortune.

Even the US, which has the MACs and the worlds biggest bond market underwriting the mortgage debt doesn't do more than 30 years.

50 years is nuts.

 

 

Perenna aim to offer 30 year fixed-rate mortgages up to 95% LTV with flexibility to change at no extra cost after 5 years.

I cant make that work.

The key difference between a Perenna mortgage and a mortgage from a high street bank is the rate type over the length of the mortgage.

As the name suggests a fixed for life mortgage means the monthly payment over the whole life of the mortgage is fixed.

With Perenna, you never have to worry about refinancing dates or going onto higher interest rates. You can take your mortgage with you when moving to a new home or sell your home with the mortgage. You can pay back the loan without repayment charges after 5 years.

Again. I cant make that work.

explainer-v2.png

Perenna is shaking up the mortgage market with our unique funding model. Our mortgages will be financed by issuing covered bonds on the London Stock Exchange.

The bonds are bought by investors who receive an interest payment for the loan term. Your monthly mortgage payment is passed through Perenna to the investors. You can even buy these covered bonds yourself.

As a borrower you’ll never have to think about the investors. In fact, you’ll never notice they exist.

 

OK, they are unregulated = expensive.

Theyll raise a pool of bonds to cover your mortgage,, say sell 50 bonds at 50th of the mortgage debt, which will be sold off. Not sure if theyll be pooled.

They'll have to get their model 110% correct. And theyll have to go big v quickly to get the volume to sell this stuff.

The sounds painfully like P2P, with the extra expensive of selling a bond.

As rates rise, the bond yield is going to go sky high.

2019 -

https://www.mortgagesolutions.co.uk/news/2019/04/15/pension-funded-intermediary-lender-perenna-plans-fixed-for-life-mortgage-launch-exclusive/

2020 -

https://www.mortgagestrategy.co.uk/news/new-lender-perenna-looks-to-offer-95-lending/

2021 -

https://www.thetimes.co.uk/article/bank-plans-30-year-fixed-mortgage-n8lqzg0b9

Still not mortgage. Theyve been fucking around for at least 3 years and not sold a single mortgage.

 

2008 - 

5D buys Interbay

InterBay Commercial has revealed that it had been purchased by the 5D Group.

By System Administrator 10th September 2008 11:47 am

The company will be merged with commercial mortgage lender 5D and re-launched under the InterBay Commercial name.

InterBay Commercial chief executive Colin Bell says: “It is with great delight that I am able to announce an exciting new chapter for InterBay Commercial in the UK.

“We now have a great opportunity to merge with 5D and relaunch our company – all with the strong financial backing of our new parent.”

Bell says during the merger and planning phase Interbay will temporarily cease new business. He says there is no set time frame for a return but is confident Interbay will return when market conditions improve, with the help of the 5D funders.

Bell adds: “We have spoken with our intermediary partners and are working through our pipeline to ensure all brokers and potential borrowers are treated fairly during this period of change.

“I cannot reveal our future plans at this juncture but I will say that this initiative is good news for the business.”

5D ceased trading at the end of last year thanks to a lack of funding, but did promise to return to the mortgage lending market in the future. 5D were unavailable for comment.

 

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I wonder if BoE is tweaking stuff, just not in the way the moron personal finance press think.

Since peaking with lending 95% mortgages to people whove self certed and borrowed the deposit on a cc, boe continues to move out of financing mortgages.

First step was MMR, getting rid of fuckwitted self cert.

Next was higher capital required for banks, who have to chuck in chunky bit of of capital - 10-15%

Next step might be getting 3rd party fixed bonds into funding, spreading the risk further and reducing bie exposure.

 

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https://uk.finance.yahoo.com/news/bank-england-orders-lenders-put-174424618.html

"Banks will have to set 1% of their capital aside as part of the so-called countercyclical capital buffer, following the Bank’s decision on Monday. The Bank slashed the buffer to zero in the early days of the pandemic, freeing up the money that the banks had previously set aside to cover shocks."

“The UK banking system has weathered the pandemic well,” said Bank of England Governor, Andrew Bailey. “UK banks’ capital and liquidity positions remain strong, and they have sufficient resources to continue to support lending to the economy.”

Probably not a game-changer, but clearly messaging that the pandemic and associated support is over.

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