Nationwide will stop offering interest only mortgages to new borrowers from 11th October. Nationwide has taken this step as the FSA puts pressure on lenders. Existing interest only customers can keep them but cannot extend them. It’s also in light of the fact that interest rates are only around 3% taking the need out of interest only payments and the fact that it’s not worth the hassle checking borrowers could repay the monthly payments.
In May the Coop took a similar step whereas Santander, HSBC and the Nationwide had decided to offer the deals to those borrowers who could put down a 50% deposit.
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