Criteria change to interest only remortgage deals.

In relation to interest only remortgage deals, mortgage lenders are being accused of implementing Mortgage Market Review proposals for a criteria change too soon.

Lord Turner, the chairman of the Financial Services Authority has advised MPs that looking back, the requirement for lenders to take into consideration interest only remortgage borrowers spending on items such as recreation and clothing in affordability assessments, is actually completely impractical.

He advised the Treasury Select Committee that the initial proposals put forward on how to calculate a mortgage's affordable were theoretically desirable, but in reality far too complex to put into practice. Questions relating to borrowers expenditure have been shown to be far too detailed.

February saw Abbey for Intermediaries change its interest only remortgage expenditure assessment. Abbey now require all customers to complete details of all regular and non regular monthly outgoings. These include spending on birthdays, religious festivals such as Christmas and holidays. In light of Lord Turner's comments did Abbey act too soon?

In their defence Abbey who have already changed their criteria, have advised that changes can take a long time to implement and therefore policies were introduced based on the initial MMR paper. Many other lenders also advise that they took the decision to implement changes from early on to avoid having to rush through a lot of changes all at one time.

With lenders recent interest only mortgage criteria changes, it can be difficult for individuals looking for a deal to keep up to date.

At Deal Direct we are completely up to date on all lenders criteria and rates.

We offer impartial and accurate advice and know the best lenders to contact for a deal tailored to your needs. Contact us today, we will find you the most competitive interest only remortgage deal available and help you to answer any complex interest only questions.