Kensington review latest mortgage deals on interest-only.
For latest mortgage deals arranged on an interest-only basis, Kensington are requesting a review of the repayment vehicles proposed by those taking out a deal.
Kensington has recently written asking for evidence that customers who have taken out their latest mortgage deals for interest-only products, are on track with regard to paying off the total capital sum owed at the end of the deal.
Kensington advise that their responsible lending policy obliges them to review interest-only deals to make sure that mortgage holders proposed repayment vehicles are operating as they should. They require documentary evidence within 2 weeks of receipt of their letter confirming customers saving plans are on target. They also request confirmation of all payments made into the plan.
A Kensington spokesman has said that they have no immediate plans to implement changes to their interest-only mortgage policy. The lender added that they are conducting the exercise for decision-making and education purposes only.
In a recent Financial Service Authority proposal outlining new interest-only rules, the regulator specified that lenders should check on mortgage holders proposed repayment vehicles at least once during the mortgage term. The FSA has advised that its proposals are designed to prevent a return to risky mortgage lending.
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