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Risk of mortgage prisoners due to withdrawal of interest-only

POSTED: 12th November 2013
IN: Newsroom
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Aldermore, Britain's leading challenger bank, is warning of a potential rise in mortgage prisoners, due to lenders pulling out of the interest-only mortgage market.

Many lenders have withdrawn from the interest-only market or have significantly paired back their maximum LTVs following the Mortgage Market Review, which comes into force in April next year.

People who were previously on an interest-only mortgage who now wish to remortgage or capital raise, may find themselves trapped if their lender has withdrawn from the market.

They will need to move lender as a result. This may necessitate converting to a more expensive capital repayment mortgage.

However, Aldermore is continuing to lend in the interest-only market and within the MMR principles, by ensuring clear repayment strategies are in place and that the loan could be serviced on a repayment basis if ever needed.

Charles Haresnape, Managing Director, Residential Mortgages, Aldermore Bank says:

"We remain open for business in the interest-only area up to 75% LTV, having revised our criteria. Many potential interest-only borrowers are very creditworthy and, with the right level of lender due diligence, would be excellent borrowers. We want to help those people who are at risk of becoming mortgage prisoners."

 
**Ends**

For further information journalists can contact:

Nicola York
Nicola.York@cicero-group.com
Office: 0207 297 5965
Mobile: 07841 864 107
For further information about Aldermore, our financial backers and our PR contacts, please review our Notes to Editors page.

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