I am at a loss to understand the new Halifax criteria on interest-only mortgages.
This appears to be a knee-jerk reaction to pressure from the Financial Services Authority which does not understand the realities of the mortgage market.
We now have the ludicrous situation where, presumably, Halifax will be happy for a borrower to default on a mortgage leading to repossession rather than allow the payment method to be changed to interest-only.
It is also a fact that making overpayments on an interest-only mortgage reduces the balance owed in the first few years faster than that on a repayment basis.
The other problem I have is that lenders such as Halifax are able to change the terms of mortgage offers retrospectively without any reference to basic contract law.
Halifax is fast becoming a lender of last resort and as others have already said in Mortgage Strategy, it looks as though it is treating brokers like second class citizens.
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