As Co-op withdraws interest only mortgages home-owners turn to Deal Direct for advice.
It has been recently reported that new customers wanting mortgages from the Co-op will not have the option of interest-only products. This includes products offered by Platform, through brokers such as Deal Direct, and Britannia who joined the Co-operative Bank in a merger 3 years ago.
New customers with the Co-operative group will only be offered repayment mortgages which are more expensive in terms of monthly payments. Payments to cover both interest and repayment of the capital loan are required for this type of product to factor in repaying the loan over its term.
It has been suggested that existing customers with interest-only mortgages may be able to switch to another Co-op product when their existing current deal ends. However this may only apply to the same level of loan and other restrictions may apply.
The Financial Services Authority's recent mortgage market review has lead to new rules making lenders responsible for ensuring that there is a vehicle in place for repaying a loan. While there are still interest-only mortgages in the market, lenders have generally reduced the limit of loan to value to 50% or less.
By withdrawing interest only products, the Co-op is the latest to react to the new rules which are expected to be fully in place in 2013. If you have an existing interest-only loan and are looking at remortgaging, Deal Direct can source alternative products from the many lenders in the market.
Call Deal Direct for a full range of mortgages, we are whole of market brokers with access to deals from lenders throughout the market. We offer professional and impartial advice to help you find a product to suit your circumstances and save you money.
