A further lender withdraws from interest-only mortgage lending.
Nationwide has announced that from 11 October it will no longer offer interest-only mortgages.
A spokesperson for Nationwide commented advising that it is not a niche lender, adding that ever since the FSA's clamp down on lending, interest only has become a niche product.
Nationwide has confirmed that existing interest-only mortgage-holders will not be affected by this change in lending policy. However the building society has stated mortgage-holders will not be able to borrow any additional funds on this basis.
Interest- only was a popular product during the 1990s and early 2000s, and at its peak in 2007 it accounted for over 30% of all approved mortgages. It was a mortgage which enabled many would-be buyers to purchase a home with a far lower monthly cost than a straightforward repayment deal.
The FSA has highlighted the fact that many lenders approved applications from those with no means to repay the capital at the end of the loan. The fear is will lead to a massive problem for both home-owners and lenders as loans mature over the next decade. It is anticipated that many will come to the end of their mortgage term with no way to clear the debt, forcing them to sell their home.
If you have an interest-only mortgage without an adequate repayment plan you are advised to call Deal Direct without delay.
Our experienced, skilled advisers will review your circumstances and search through all lenders offers to find you a repayment mortgage to switch to.
Do not delay contact Deal Direct today.
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