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Offset Mortgage Pioneer Intelligent Finance Pulls Out Of Market

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Offset mortgage pioneer Intelligent Finance pulls out of market

Intelligent Finance, the pioneering online bank launched by Halifax nine years ago, is to quit the market for new mortgage lending and will sell just savings products under restructuring plans announced by its new owner, Lloyds Banking Group.

The bank, which was an early enthusiast for offset mortgages, hoped to change the world of banking when it was launched in autumn 2000. But under plans announced by Lloyds yesterday, which include the closure of all branches of Cheltenham & Gloucester, IF will be reduced to a shadow of its former self and stop selling mortgages altogether.

IF's existing mortgage customers are unaffected, however. Lloyds' statement said: "From 1 July, Bank of Scotland and Intelligent Finance, while continuing to service the needs of existing customers, will no longer write new intermediary mortgage business."

IF abandoned direct sales of mortgages in 2007, selling only through intermediaries such as brokers, this means that it will no longer sell mortgages. The statement added: "Savings ... will continue to be available to new [iF] customers via the phone and web as usual."

The Lloyds group will continue to sell offset mortgages via the Scottish Widows brand, but the mortgage ranges are different and some deals available from IF may disappear.

For example, IF offers a five-year fixed rate offset for borrowers with a deposit of 25pc at a rate of 5.59pc. The closest equivalent from Scottish Widows is a two-year fixed-rate offset charging 3.88pc with the same deposit requirement. Although the rate is lower, some borrowers prefer a longer fix, while the wholesale costs underpinning the loans are different.

A spokesman said rationalisation of the Lloyds group, which has seven mortgage brands following the takeover last year of HBOS, was "inevitable" in the current downturn. "Seven brands don't make sense in the current climate," the spokesman said.

IF was launched by Jim Spowart who had previously helped launch Direct Line. But IF, which promised to revolutionise our approach to personal finances, suffered the embarassment of being forced to delay its launch due to technical problems. Scheduled for launch in July 2000, the internet bank did not go live until November 30.

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" "Seven brands don't make sense in the current climate," the spokesman said. "

:P:P i.e. It's much harder to peddle the LIAR LOANS now..... And - even now with prices down 20-30% -

95% of FTBs CANNOT BUY UNLESS THEY OBTAIN A LIAR LOAN.

IT IS IMPOSSIBLE FOR THE AVERAGE FTB TO BUY SENSIBLY --- TOTALLY IMPOSSIBLE.

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