FSA cancel interest-only rule changes
The Financial Services Authority have said that it's abandoned a proposed new rule that would have forced lenders to turn down mortgage applications where borrowers were unable to demonstrate their ability to repay the whole mortgage within 25 years. The rule would have also applied to those planning to take a mortgage on interest-only over 30 years.
A total ban on interest-only has been ruled out as the FSA acknowledge that there is a need for different types of repayment plans in the market and that they recognise they cannot take a “one size fits all†approach.
March 28, 2011
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