Morgan Stanley Launches 'Flexishare' Mortgage
New 'profit share' mortgages launched by investment bank
1st August 2006
Investment banking giant Morgan Stanley have launched a new 'profit share' mortgage under the brand name of Advantage.
The new Flexishare mortgages will allow customers to borrow more than they would traditionally be offered by conventional mortgage companies, in return for sharing any increase in the value of the property when it comes to be sold. Morgan Stanley say that this will help more first time buyers to move from renting to ownership.
A 5% deposit is needed, but the mortgage can cover up to 80% of the value of the property. A further 'residential ownership loan' of up to 35% of the value can be taken out to cover the rest of the purchase, and it is this loan which determines how much of the selling-price profit you need to repay.
If your loan covered 10% of the property's value when you bought it, you'd have to share 10% of any profit you make when you sell it with the bank.
Housing minister Yvette Copper welcomed the launch, saying:
"As house prices have gone up, more and more families who could keep up with regular mortgage payments can't manage that first step onto the ladder."
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