The new boss of Barclays is worried that interest-only mortgages could end up costing the bank billions of pounds and lead to significant customer complaints.
Antony Jenkins said, ‘We spend a lot of time trying to look over the horizon to what might be complaints in the future – such as interest-only mortgages’. Jenkins disclosed that the bank was beginning to see the ‘first few thousand’ borrowers on their interest-only books struggling to pay back the capital.
Woolwich, an offshoot of Barclays, will not lend interest-only to any homeowner who does not have at least £150,000 of equity.
It clearly is a view echoed by both large and small lenders. It is now virtually impossible to get an interest-only mortgage at a loan-to-value above 75%. That means a deposit of at least 25% is required.
Some lenders have even capped this at 50% – and with such stringent criteria to qualify that it is virtually impossible to elect for this method.
At Limetree we do our best to find a mortgage that you qualify for and that gives you a good deal. For advice on interest-only mortgages, please call 01223 266140 where one of our locally based advisors will try an answer your concerns.