Nationwide's interest-only ban kicks in
Nationwide Building Society's ban on interest-only mortgages has come into force and all mortgage applications must now be taken on full capital repayment. It is not unusual for a lender to tighten their interest-only lending policy and ask for proof of a repayment vehicle, such as an ISA or an endowment policy, but Nationwide has gone one step further.
Aaron Strutt, a broker at Trinity Financial, says: â€œNationwide reported that less than 3% of their applicants requested interest-only and there is simply not the demand, but I think this is highly unlikely. â€œThere are still lenders offering interest-only particularly on larger loans. One lender we work with is happy to put half of the mortgage on pure interest-only and write annual overpayments into the mortgage contract.
October 12, 2012