cashinmattress Posted June 5, 2013 Share Posted June 5, 2013 link Barclays is to clamp down on interest-only mortgages by demanding borrowers earn at least £75,000 a year.Couples will face the same test — or have to show proof of £100,000 in shared income. Existing customers will be unaffected by the new rules, which took effect from yesterday, until they remortgage. Barclays is the latest major bank to restrict interest- only lending. ... Why now? Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted June 5, 2013 Share Posted June 5, 2013 link Why now? and what if when it comes to renewal, the couple cant afford anything but? Quote Link to comment Share on other sites More sharing options...
SleepyHead Posted June 5, 2013 Share Posted June 5, 2013 Just in the nick of time! Quote Link to comment Share on other sites More sharing options...
Vested Disinterest Posted June 5, 2013 Share Posted June 5, 2013 (edited) and what if when it comes to renewal, the couple cant afford anything but? they'll both be given £50k jobs at Barclays of course. Edited June 5, 2013 by Vested Disinterest Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted June 5, 2013 Share Posted June 5, 2013 IO mortgages only for bankers? Quote Link to comment Share on other sites More sharing options...
Liquid Goldfish Posted June 5, 2013 Share Posted June 5, 2013 Is HBOS group the only major lender left doing IO? Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted June 5, 2013 Share Posted June 5, 2013 Is HBOS group the only major lender left doing IO? nah, Seven Dwarves Bank are still singing its praises. Quote Link to comment Share on other sites More sharing options...
RDW Posted June 5, 2013 Share Posted June 5, 2013 and what if when it comes to renewal, the couple cant afford anything but? They'll have to go interest only on the SVR. Quote Link to comment Share on other sites More sharing options...
pjw Posted June 5, 2013 Share Posted June 5, 2013 They'll have to go interest only on the SVR. Which means the whole game of working out whether a remortgage is "affordable" is just a con - if they decide the mortgage is not affordable according to their criteria, you still get to keep your product, but at a more expensive interest rate - if they were really worried about affordability, they would put you on the lowest interest rates... Quote Link to comment Share on other sites More sharing options...
vzzzbx Posted June 5, 2013 Share Posted June 5, 2013 How come interest-only mortgages are only banned for people buying the house to live in? If it's such a risk to loan on an interest-only basis, surely that should also apply to interest-only buy-to-let mortgages? At least I assume it only applies to owner-occupiers. Somehow the rules always seem to be different for buy-to-let. Quote Link to comment Share on other sites More sharing options...
Scarlet Posted June 6, 2013 Share Posted June 6, 2013 How come interest-only mortgages are only banned for people buying the house to live in? If it's such a risk to loan on an interest-only basis, surely that should also apply to interest-only buy-to-let mortgages? At least I assume it only applies to owner-occupiers. Somehow the rules always seem to be different for buy-to-let. To answer your question. The two people I know who do BTL intend to sell their 'investment' at the end of the 25- year loan so there is no concern on behalf of the borrower or the bank because the owner won't be living in it and over 25 years the profit is enough to repay the original loan and allow the owner to retire in 'luxury'. Maybe this is stupid, but I often wonder what will happen when a glut of BTL properties hits the market in the future with everyone cashing in at roughly the same time? Isn't this move due to the general nervousness (brought about by FSA?) re; owner occupiers not having any kind of repayment vehicle in place and the banks' fear they'll get sued for mis-selling IO mortgages and not ensuring borrowers have actually made provision to pay off their capital at the end of the term? All seems like too little, too late to me if it's not going to have any effect on existing borrowers. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted June 6, 2013 Share Posted June 6, 2013 To answer your question. The two people I know who do BTL intend to sell their 'investment' at the end of the 25- year loan so there is no concern on behalf of the borrower or the bank because the owner won't be living in it and over 25 years the profit is enough to repay the original loan and allow the owner to retire in 'luxury'. Maybe this is stupid, but I often wonder what will happen when a glut of BTL properties hits the market in the future with everyone cashing in at roughly the same time? Isn't this move due to the general nervousness (brought about by FSA?) re; owner occupiers not having any kind of repayment vehicle in place and the banks' fear they'll get sued for mis-selling IO mortgages and not ensuring borrowers have actually made provision to pay off their capital at the end of the term? All seems like too little, too late to me if it's not going to have any effect on existing borrowers. The other plan of course is that rents have increased with inflation and in 25 years you can start paying off the loan whilst still living in luxury, and perhaps repay the principle in 5 years. Quote Link to comment Share on other sites More sharing options...
deflation Posted June 6, 2013 Share Posted June 6, 2013 Is HBOS group the only major lender left doing IO? When I asked them 18 months ago, they had a minimum income of , I think £35k for an IO mortgage. Quote Link to comment Share on other sites More sharing options...
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