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Halifax Puts Further Restrictions On Interest-Only

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Halifax Intermediaries will now require evidence of the repayment plan for all borrowers taking out an interest-only mortgage before they proceed to offer stage.

From next Tuesday the deal will only be accepted if the evidence meets its criteria and covers the full amount requested on an interest-only basis.

Existing customers are also now required when making the application to provide a copy of evidence of a suitable repayment plan if they want to convert all or part of their mortgage from repayment to interest-only.

Once received, Halifax says this evidence will be checked against its list of acceptable repayment vehicles and the mortgage account will then be transferred to interest-only.

In April this year the lender imposed the same criteria on those applying for an interest-only mortgage in branch.

A spokeswoman for Halifax Intermediaries, says: “This move aligns Halifax Intermediaries’ interest-only policy with the approach for mainstream lending across all brands and channels within the group.

“It is important that can see that customers looking to borrow on an interest-only basis have an appropriate repayment plan in place.”

Going to be a lot harder to lie.

Also:

Halifax, the country's largest mortgage lender, has just added an extra 0.2pc in fees to its fixed-rate introducer range for borrowers who opt for an interest-only deal.

and,

It is introducing a cap which means it will refuse to hand out an interest-only mortgage for more than £500,000.

and,

LIt has also changed the types of 'repayment vehicles' which it will accept. Lloyds said that it will no longer accept some of the most common explanations – to sell the property, to sell a business or to come into an inheritance.

and,

Santander will allow interest-only borrowers with what it describes as 'a proven repayment vehicle in place' to borrow up to 75pc – down from 85pc – with those unable to produce evidence of a repayment vehicle limited to 50pc.

That effectively puts a proverbial nail in the HPI coffin.

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I want to know why they were not doing this in the first place? Why has it taken them four years after the financial crisis to implement these changes?

Theres a saying for things like this, something to do with horses and stable doors.

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I want to know why they were not doing this in the first place?

Quite.. Not sure what the £995 application fees have been for either..

Still it's good news, let's hope the others follow

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Maybe theres more to it, but all a first time buyer wanting a IO just has to provide evidence of an ISA which they plan to deposit say £300 a month into..

but you can stop making payments anytime, no one checks.?

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But property only goes up? I'll just sell at the end of term, repay the mortgage and still have enough left over to buy another house for cash.

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Maybe theres more to it, but all a first time buyer wanting a IO just has to provide evidence of an ISA which they plan to deposit say £300 a month into..

but you can stop making payments anytime, no one checks.?

presuming their financial records show they have £300 spare and a reocrd of saving it...

Edited by daiking

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I want to know why they were not doing this in the first place?

Too many people making too much money in the good times?

Sorry, what's a 'repayment vehicle' ?

It's what bailiffs drive.

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I would point to the Bank of England's failure over 7 years to be well above its inflation target and say that well, at 5% a year, the value of the loan outstanding will be less than half of what it is today in 10 years time, all else eing equal. Is that good enough?

If wage inflation kept pace with price inflation, it would probably be good enough. Wage inflation? Pfff.

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"to sell the property, to sell a business or to come into an inheritance?"

That counts as planning does it? FFS.

Sounds like one to keep the criminal courts busy to me.

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How long could you fix for last year? Little sis is with the halifax and had finished a 5 year fixed io only... I've not been given details of what mortgage they've changed to - other than I know they're struggling and I suspect the secrecy is cos my parents are helping them out.

How many people with the halifax are going to be changing any time soon?

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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