{"id":25134,"date":"2023-08-11T16:04:36","date_gmt":"2023-08-11T15:04:36","guid":{"rendered":"https:\/\/smh.group\/?p=25134"},"modified":"2023-08-11T16:04:36","modified_gmt":"2023-08-11T15:04:36","slug":"a-banking-crisis-close-to-home","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/a-banking-crisis-close-to-home\/","title":{"rendered":"A banking crisis close to home?"},"content":{"rendered":"

Rising mortgage rates are posing some difficult questions for one of the major providers of housing finance. <\/strong><\/p>\n

You would think that a group estimated to have provided \u00a38.8 billion of residential property finance to 170,000 first-time buyers in 2022 would be well known, with a high street presence and careful oversight from the Financial Conduct Authority (FCA) and the Bank of England. However, you would be wrong.<\/p>\n

The group in question has its own acronym, BOMAD \u2013 the Bank of Mum and Dad \u2013 and has been a consistent supplier of gifts and\/or loans to nearly half of first-time buyers for the last decade. While the BOMAD generally does not charge interest, the increase in interest rates that has occurred over the last 18 months could see it facing some difficult questions. With very few exceptions, the first-time buyers that the BOMAD financed will also have borrowed from mainstream lenders and thus be facing increased mortgage costs at some point, typically when their two-year or five-year fixed rate mortgage deal ends.<\/p>\n

The FCA has already told mortgage providers that they should consider offering borrowers:<\/p>\n