Tesco has pulled out of the mortgage market amid a price war among lenders that has pushed down rates for borrowers and piled pressure on smaller providers. The 23,000 mortgage customers of the supermarket’s banking business will not see any immediate change to existing arrangements.
Yorkshire Building Society has become the latest big name to launch an interest-only mortgage. If you have a reasonable deposit saved up please give us a call.
Interest-only mortgages were once common but virtually disappeared after the financial crisis, amid fears that many borrowers were not setting aside enough money to repay their debt. Borrowers do not repay any capital during the course of the loan, so when their mortgage term ends they need to pay back their equity.
Under new lending criteria, borrowers have to show lenders that they have a repayment strategy in place.
There were twice as many interest-only products on the market earlier this month as there were six years ago, according to Moneyfacts.