Lloyds TSB puts an end to interest-only mortgage switching via Cheltenham & Gloucester
November 2, 2008 by Brendan
News
With the current financial climate many home owners are opting to switch their repayment mortgages to interest-only mortgages as a way to be able to make ends meet. It’s often a last resort for home-owners who can’t afford to make the full payments on their mortgage.
However the option of switching to interest-only mortgages is no longer open to customers of Lloyds TSB and their mortgage provider, Cheltenham & Gloucester.
This news emerged from Lloyds TSB on the back of an increase in repossessions over the three months from April-June, by 71%.
With a mortgage of £150,000, switching from repayment to interest-only could save a borrower over £200 per month on their mortgage payments. With the cost of living rising constantly this represents a lifeline for many homeowners.
The new policy was introduced by Cheltenham & Gloucester just one week after Prime Minister Gordon Brown introduced new procedures to ensure that mortgage lenders examined every possible alternative before attempting repossession of a home.
A spokesperson for Cheltenham & Gloucester stated:
Existing customers with their lending on a repayment basis can no longer switch their payment method to interest only.
Frances Walker, part of the debt charity Consumer Credit Counselling Service, stated:
This is not in the spirit of the new scheme announced by the Government last week.
Lloyds TSB however appeared to back track on the move, with a spokeswoman stating that interest-only mortgages are still an option for those in financial difficulty:
If a customer is in financial difficulty, then switching to interest-only will still be an option.
Written by
Brendan
You may also interested in:
First quarter lending increase revealed by NatWest
NatWest has revealed that it saw a significant increase in lending during the first quarter of this year, with the stamp duty deadline being credited as the main reason for
Nottingham Building Society hires new chief lending officer
Nottingham Building Society (BS) has announced the recruitment of a new chief lending officer, with Aaron Shinwell the man who has been appointed to the role.
