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Lender denies interest-only mortgages
Fri, 31 Oct 2008
According to reports in the mortgages news, Lloyds TSB has stopped its mortgage borrowers from switching their mortgage loans to interest-only deals. The switch is only available to those customers that already have 25 per cent of equity .

A spokeswoman for the mortgage lender, Amanda Glover, was reported as commenting: "In an environment where house prices are falling rapidly, the change has been made to encourage customers with high loan-to-value mortgages to protect the existing equity in their homes. Both new and existing borrowers with more than 25% equity can still switch to an interest-only deal."

The move flies in the face of government advice to mortgage lenders . The technical manager at London and Country, Richard Morea, reportedly commented: "With house prices falling it's always prudent for customers to avoid negative equity, owing more than their house is worth, but Lloyds TSB's move is not hand in hand with the government's wishes."

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