The Financial Times and Independent on Sunday reported this weekend on further restrictions to lending criteria. Nationwide and Coventry Building Societies have become the latest lenders to restrict interest-only borrowing to 50% of the property value, and experts suggested that it will be increasingly hard for other mortgage providers to keep their current policies. Borrowers who don’t meet the equity requirement could consider withdrawing cash from their repayment vehicle early and using it to reduce their loan, but brokers pointed out in the Sunday Telegraph that the markets have struggled recently so now might not be the best time. A better option would be to switch to a repayment mortgage if affordable, or overpay where possible while rates remain low. The Telegraph and Sunday Times reported on last week’s closure of the stamp duty window for First Time Buyers, who will now have to pay 1% on property purchase between £125,000 and £250,000, and 3% over £250,000. Some lenders have already taken steps to help, with Halifax offering to foot half the bill for those choosing a specific 2 year fixed rate, while Nationwide is offering £1,000 cashback for borrowers who open a Flex current account alongside the mortgage. Experts welcomed such assistance, but advised potential purchasers not to be blinded to how competitive the deals really are.
What the papers say – 24th – 25th March 2012