Wednesday, Sep 23, 2015

The start of greater tightening?

Telegraph: Banks slash another 300,000 interest-only mortgages

The banking sector is shifting customers off interest-only home loans over fears they are a "time bomb" for customers who do not have a plan in place to repay the debt

Posted by hpwatcher @ 04:47 PM (5012 views)
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5 Comments

1. libertas said...

Not really. In reality, repayment mortgages are now so cheap, that demand has reduced significantly for interest only mortgages. I assure you, banks have not suddenly obtained a conscience.

Wednesday, September 23, 2015 10:27PM Report Comment
 

2. icarus said...

"Banks and building societies cut another 300,000 interest-only loans from their books last year, industry figures show, as the sector acts to calm regulators' fears that there are too many customers who do not know how they will pay back the loans at the end of the term."

Is that how regulation works? Regulators communicate their 'fears' to banks, and bankers decide whether or not to act to calm those fears?

Thursday, September 24, 2015 03:50PM Report Comment
 

3. cyril said...

How come repayment mortgages have suddenly become cheap? I've just looked up the 'best deal' on one of those comparison websites and it works out at 4.8% APR. Still it's only money so who cares.

Thursday, September 24, 2015 03:52PM Report Comment
 

4. hpwatcher said...

I am hearing that the pressure to tighten/unwind is now growing quite considerably.

Without the beginning of a winding cycle, you could well be looking at a collapse in bonds - and a large and thoroughly uncontrolled hike in IR's; I'm not sure anyone would want that.

Thursday, September 24, 2015 09:29PM Report Comment
 

5. clockslinger said...

Libertas is right. There is nothing the banks would like better than to get a real asset for the electronic magic bean "money" they lent you when you (thought you) "bought" (sic) it. Bait and switch. Worked like a charm in Latin American countries in the seventies and eighties, going on in Greece right now...

Friday, September 25, 2015 06:39PM Report Comment
 

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