Interest-only mortgages hit again
Nationwide Building Society is the latest lender to change their lending policy and they now require a 50% deposit to secure an interest-only mortgage.
Earlier this week the Coventry Building Society adjusted their interest-only requirements and they also require a 50% deposit.
Over the last few months banks have been under increasing pressure from the Financial Services Authority to tighten their risk procedures and exposure levels. Their intervention is filtering through to the mortgage market and mortgage rates are changing accordingly.
Over one million interest-only borrowers over 50 may be unable to remortgage when their mortgage term ends over the next 10 years, according to the FSA. In 2011, 51,500 borrowers took an interest-only mortgage, down from 251,000 in 2007.
March 23, 2012
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