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Leaving brokers with nowhere to churn

There’s something particularly appealing about a building society chief executive. It’s the thrill of power. The same charisma that makes normally sensible women throw themselves at deputy prime ministers exudes from the pores of those chaps in suits who make big decisions about consumers’ finances between the next game of golf and the last glass of port.

And then there’s Mike Lazenby. A building society chief executive with a difference. I’m sure he gets his fair share of women throwing themselves at him but he is not your typical building society boss. As chief of the Kent Reliance – aka the Internet Building Society of India – he has proved himself a visionary.

As a smaller cog in a bigger society his creativity would be and has been stifled. But as the big wheel on the tiny Kent Reliance wagon he is given free rein to come up with The Next Big Thing.

Under Lazenby, Kent Reliance is the UK’s fastest growing society. It has cut costs to the bone through offshoring and online applications.

But Lazenby’s latest, greatest idea is a real humdinger. The Death Bed Mortgage or the intergenerational mortgage, as it is less morbidly branded. It is suitable for the parents of grasping brats. As they sob quietly into their hankies while the lawyer prepares to read your last will and testament, you get the last laugh from the grave. To my little darlings I leave – a whopping great mortgage. Superb.

The Death Bed Mortgage is an interest-only mortgage that you pay forever. You can even pass it on to your kids. The loan doesn’t get paid off – only the interest is paid. It is an immortal mortgage – a debt that never dies. It’s the mortgage that lives for ever.

Apparently, similar deals are available in Japan and Switzerland and Lazenby is prepared to offer them here. I can’t imagine them being advertised but if anyone fancies one they can ring up Lazenbys team in India and he’ll consider their application.

It’s been called a radical shake-up of the mortgage industry but I don’t think Lazenby’s brave vision will catch on.

The main reason is that no matter how low interest rates are, UK borrowers will always consider their mortgage as an albatross around the neck. Their aim is to pay off their mortgage as quickly as possible.

Another reason is that parents want to provide for their children and handing them a huge debt to maintain would not fit with that strategy.

But the greatest opposition to the Death Bed Mortgage will come from mortgage brokers. What intermediary worth his proc fee would recommend a deal that lasts forever? Where’s the fun if there is no opportunity to churn?

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