Saturday, Feb 25, 2012
"The interest-only time bomb is a significant issue, which still needs resolving"
Mortgagestrategy: Why lenders are curbing interest-only
So what’s to be made of the recent furore over interest-only loans - are they all bad and if not then why are lenders running away from them?
There seems to be much comment in the market following Lloyds Banking Group’s decision to bring in changes to interest-only mortgage criteria after Santander cut its interest-only LTV from 75% to 50%.Last week, Accord announced the withdrawal of their 75% and 85% LTV products following an uplift in interest-only applications blamed partly on the recent decisions taken by Santander and Lloyds. Leeds is the latest lender to announce cuts in criteria.
Posted by jack c @ 10:46 AM (1203 views) Add Comment
6 Comments
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1. paul said...
Somewhere along the line some lenders also dropped the need to investigate whether a repayment vehicle existed at all and then interest-only really took off
Yes, point that out and you'll still have your three fingers pointing straight back at you.
2. sibley's b'stard child said...
Nice, so if you were a mortgage broker with morals you wouldn't get the business. What a mess.
3. mark wadsworth said...
It looks increasingly as it they might mean it this time.
4. quiet guy said...
"If you were a lender that tried to investigate the viability of repayment plans then you were deemed too picky by intermediaries and so followed suit or lost market share."
Greed never gets old; it just goes to sleep for a while. This is why there will be another boom some day and the cautious and prudent mortgage providers will be sidelined again.
5. Thegreenmanalishi said...
I'm wondering if Basel III could be the straw that breaks the camel's back for us.
BTW are they doing this with BTL mortgages also?
6. libertas said...
The free market provides perfect resolution for this. Higher interest rates and BANKRUPTCY.
Let those who screwed up pay.