So Lloyds Banking Group is no longer offering borrowers an interest-only repayment method if they are borrowing more than £500,000. (Mortgage Strategy Online).
Picture this scenario – a middle-aged couple with four children sell their current property and have £1.5m cash.
They want a new property for £2m so they would like a £500,000 interest-only mortgage.
They pass all the usual checks and have no intention of remaining in the property forever as they will sell it when the children leave home and downsize.
Where is the bad risk in this? Lenders should get a grip. This is just another example of automated decisioning gone mad.
NAME AND ADDRESS SUPPLIED