Halifax changes its lending requirements for interest only loans

Although the FSA has announced that there would be no ban on interest only loans, some loan providers have decided to stop offering this type of loan. They are telling borrowers that they can opt for a full repayment loan instead, which is not so risky to the lender and a cheaper option for borrowers.

The last lender to change its requirements regarding interest only loans is the Halifax. It made it more difficult for borrowers to be eligible for this type of home owner loan. Other lenders from the Lloyds Banking Group have already altered their criteria in a similar way a few months ago.

Despite the fact that the Halifax won’t stop providing borrowers with interest only deals altogether, potential borrowers would have to prove their repayment ability, which would involve supporting investments like an endowment policy or an ISA, just to name a few.

The new requirements will apply to both new and existing customers. The changes come into effect today.
 


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