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NatWest suspends interest-only through brokers

NatWest Intermediary Solutions is to temporarily stop lending on an interest-only basis.

From tomorrow the lender will only offer residential mortgages on a capital repayment basis through its intermediary brand, but its direct arm remains unaffected.

NatWest says it plans to reintroduce interest-only options on some products from next week.

A spokesman for NatWest Intermediary Solutions says: “From Friday 23 March, residential mortgages in the NatWest Intermediary Solutions core, corporate and AR exclusive ranges will be available on a capital repayment basis only.

“This will be a temporary measure as we expect to reintroduce an interest-only option on selected mortgages next week. Our buy-to-let lending policy remains unchanged.

“This decision reflects the rapidly changing market conditions. It is important to note that our full range of mortgages is still available on a capital repayment basis.”

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Marketwatch – March 2012

I thought I would start writing this at 11.45pm which gave me a few minutes before joining the other night owl brokers in a hunt for Woolwich funds.

Caption Competition

xit2’s Mark Blackwell, caught here competing in the 2006 New York Marathon, is training for his second London Marathon

Another interest-only blow for the market

Nationwide’s decision to slash its interest-only LTV from 75% to 50% has been branded a blow for the mortgage market. The mutual made the change across its residential mortgage range last week in response to changes by other lenders. James Lindon-Travers, mortgage practice principal at Lindon-Travers Associates, says: “This is another nail in the coffin […]

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  • GHU 26th March 2012 at 11:20 am

    To anon 23/3 2.46 and to Bobby.

    You are absolutely right gentlemen. Perhaps I should make it clear that I write the comments in my own time and copy and paste them into here when I get a spare moment. It certainly does take a few mins out of my working time and I should only post in my lunchbreak (whenever that might be!)

  • We're all doomed!!! 26th March 2012 at 10:00 am

    Yes James, 23 Mar 2012 4:32 pm

    As a former Bank Adviser too, I’d agree with your comment, but that’s not really the point here, is it?

  • john smith 26th March 2012 at 9:40 am

    if lenders dont want to use intermediaries please just tell us rather than creating different criteria and rate different differences

  • SirFred 23rd March 2012 at 8:03 pm

    With other lenders reducing their LTV for interest only did you really think others would not follow?

    Branches will change criteria they just take longer to implement.

    For volume the broker market will always be lucrative for whatever lender or bank but funds are rare at present.

    Found Nat West to be good for me and a lot better than other lenders to deal with.

    Hopefully the news will be positive.

  • James 23rd March 2012 at 4:32 pm

    We’re all doomed!!! | 22 Mar 2012 3:29 pm

    “Forgive me, but by some of the previous comments, I’d be given to think that Nat West advisers do not give advise?”

    But, I’ll bet a pound to your penny the clients returning to the branch in a couple of years time won’t get to see the same adviser.

    I haven’t the time for bank bashing but as someone who worked for a bank I can confirm they deserve any bashing that comes their way. No doubt about it!

  • Bobby 23rd March 2012 at 4:20 pm

    Clearly not enough cases to underwrite. He seem’s to spend all day on here !

  • Tom Cleary 23rd March 2012 at 2:46 pm

    GHU – Are you still an underwriter? If so, how have you got so much time to post on here as prolifically as you do?

  • GHU 23rd March 2012 at 12:34 pm

    I always find it amazing that there is so much outrage against these decisions. IO was never a product but just part of lending criteria and most sensible lenders assessed affordability to take into consideration a cost for the payment of the capital sum. I do, however, appreciate that there were lenders who built affordability calculators that allowed for lower IO payments but most of these have taken their punishment and have either disappeared or now state owned. On this basis I find it quite refreshing that a lender is looking at IO as a stand alone product and is therefore looking to defend the position regarding IO. Every lender knows it is going to be ‘stuffed’ by the FSA’s hard line on IO and that this is very much a closing of ‘the stable door situation after the horse has bolted’ but at least a position is being taken that might be more optimistic than some brokers think it is. Ok, I am pretty positive that the products will have a premium attached to the price but that is common sense because IO is less cost effective for a lender. That’s a fact of life and is the penalty someone will have to pay for what is becoming a niche market. Besides which the time when lenders issued break even products without a thought to margin are clearly gone for at least the next 5 years.

    So don’t show your pain yet but wait and see what happens. It is still actually a reasonably competitive market even with the reduced amount of funds available and Nat West may actually be doing something for the broker (I don’t work for them I hasten to add). We can’t know anything yet so hold back the wailing and gnashing of teeth until the new products emerge. I for one will be highly interested as to what they will do because small lenders also want to find competitive advantage where we can.

  • jools 23rd March 2012 at 11:58 am

    no bobby, it’s Natwest – Helpful Banking;-)

  • Ancient Wisdom...is a mortgage broker in N3 23rd March 2012 at 10:55 am

    Sickening development.

    Next email: Nat West products no longer availabel via brokers.

    NWIS – have used brokers to gain new clients, now telling us where to go.

    Time to throw in the towel in this game.

  • Bobby 23rd March 2012 at 8:28 am

    Is this some sort of sick joke ?

  • bobby 22nd March 2012 at 5:40 pm

    If anyone here really was in any doubt of the campaign to wipe out brokers for once and for all here it is. I am trying to get clarification on the cases offered but not completed as I have 2 I have been working on for months due to complete in the next 2 weeks so if the withdraws these offers I will lose another £ 2000 and that is just about the only money due in.

  • jools 22nd March 2012 at 4:56 pm

    can’t wait to see the new I/O deals they launch….BBR+8.9% or fixed at 10%, must be over the age of 80 with 2 grandparents standing as guarator.

    Interest only for residential is dead folks, by intention or not the FSA killed it, purely by saying they were looking into it.
    Time to move on, there’s nothing to see here.

  • d 22nd March 2012 at 4:54 pm

    Yep we are all doomed at 3:29. They also advised self employed clients and public sector workers they had to take single premium ppi because they would get the sack if they did not hit their targets. O and they also received upwards of 78 % commission.

  • shock horror 22nd March 2012 at 3:54 pm

    ….and everyone hit the roof when Abbey went to 50% with or without repayment vehicle!

  • marc dougall 22nd March 2012 at 3:34 pm

    Words actually fail me…… but don’t worry folks Natwest are completely committed to the broker marker……that is when it suits them- when they have to mass sell a product to balance their books or when they want us to sell their higher margin products. And well done to the FSA for once again overseeing this and promoting consumer chioce and fair play as well as promoting independant advice- yes well done !

  • colin 22nd March 2012 at 3:30 pm

    3.19pm….yes lets wait and see…………it will be a highly convuluted proposition design to ensure that so ver few clients fit criteria that they do next to bugger all I/O lending.

    All common sense seems to be rapidly going out the window as regards mortgage lending…….all things are cyclical but its certainly a bloody big sphere !!!!!!

  • We're all doomed!!! 22nd March 2012 at 3:29 pm

    Forgive me, but by some of the previous comments, I’d be given to think that Nat West advisers do not give advise?

    Well, it may come as a surprise, but Nat West do offer an advised sale route in their branches.

    All this Bank Bashing is becoming a little stale, don’t you think?

  • john 22nd March 2012 at 3:24 pm

    yeah right, temporarily! next week it’s be “int only, but only at 55 loan to value, for board members only”

    and lettign the branches continue, surely that is completely against MMR, when are our trade bodies goign to stand up for us?

  • Kevin Vella 22nd March 2012 at 3:19 pm

    Reading too much into this ?
    Let’s see what they come up with next week when they have done their revamping.

  • Dazed & Confused 22nd March 2012 at 3:18 pm

    So…just so I have got this straight…if Mr Client with no knowledge of whether or not Interest Only would be suitable for him says he wants to have an Interest Only Mortgage that is fine and yet if I advise a client (using my 20+ complaint free years experience)that an Interest Only Mortgage would work for said client then that is not acceptable. OK…I can see where you are coming from here NatWest…if you think so little of professional advice then rest assured I for one will not bother about placing any more business with you!

  • Warwick Tidy 22nd March 2012 at 3:17 pm

    What a hoot. The Branch on the ball then !!!

  • Jonathan Burridge 22nd March 2012 at 3:16 pm

    Just so I understand, the FSA is worried about people taking interest only mortgages. So, in response to this they only make it available through a non-advised route.

    What am I missing here??? Am I the only one that is puzzled by that decision?

  • AJK 22nd March 2012 at 3:15 pm

    What a load of tosh! Are Nat West saying they prefer to offer interest only mortgages on a non advised basis which offers no protection to the consumer than advised sales via an intermediary- Hello Earth calling FSA – is this a level playing field and TCF

  • colin 22nd March 2012 at 3:14 pm

    LOL…hardly a surprise…..but to leave it open in branch stinks….dual price and dual criteria….

  • Lisa 22nd March 2012 at 3:14 pm

    OMFG