20 Mar

RBS boss against 100 per cent mortgages

RBS boss against 100 per cent mortgages

Mortgages worth 100 per cent of the value of a property are "bad banking", the chief executive of the Royal Bank of Scotland (RBS) Gordon Pell has said.

Addressing MPs at Westminster, Mr Pell commented that such deals are "immoral" and amount to giving borrowers a "loaded gun".

The RBS boss was speaking in the wake of comments by the Financial Services Authority this week that announced it would look at possible mortgage lending restrictions.

Such measures could include abolishing 100 per cent mortgages, something prime minister Gordon Brown has said he is keen to see permanently disappear from the market.

A report by the National Audit Office has criticised the Treasury for allowing Northern Rock to continue offering 125 per cent mortgages for several months after it was rescued using public funds.

Such deals were still being made available until early 2008.

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