Which mortgages would be worst hit by a financial shock?
Research published by the Central Bank looked at how a fall in property prices, accompanied by higher interest rates and a rise in unemployment, would hit home loans
Research published bythe Central Bank has found that mortgages with high loan-to-value (LTV) ratios are most vulnerable to a financial shock.
The paper, by Vasiris Tsiropoulos, looked at the risks faced by mortgage holders in a hypothetical three-year period during which property prices fell by 4 per cent, interest rates rose by 1.1 percentage points and unemployment rose by 3.3 per cent. This is a scenario based on one used by the European ...
