Lloyds Banking Group have made changes to their interest only lending criteria and now Halifax, who are part of the group, only offer a maximum loan to value of 75% for borrowers wanting to take out an interest only mortgage.
Virtually all lenders have tightened up on their interest only policy and 75% loan to value is now the average maximum that is allowed. With
effect from Wednesday 6th April, interest only borrowers will no longer be able to take a Halifax mortgage if they have a 15% deposit and this also affects customers wanting to port their mortgage.
A spokesperson for Lloyds is quoted as saying: "We had different policies cross the group and Halifax was out of line. This change means Halifax is now in line with a consistent approach across all brands."
There are a few lenders who are still prepared to be more flexible with their interest only policy. Trinity Financial have access to a mortgage lender that allows customers to borrow 90% of the property value and 75% of the mortgage can be on capital repayment, with the remaining 15% on interest only. This makes the monthly repayments more affordable and the loan is still on track to be repaid by the end of the term.
April 1, 2011
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