Clampdown on interest-only mortgages traps borrowers | Money | The Observer

Clampdown on interest-only mortgages traps borrowers | Money | The Observer

The UK's major high street lenders have made it almost impossible for thousands of homeowners on interest-only mortgages to move home. The new, stricter rules on lending criteria, also mean very few new borrowers will qualify for an interest-only product.

Lloyds Banking Group will no longer accept cash savings, including Isas, as an acceptable way to fund the repayment of an interest-only mortgage. Instead, Lloyds – which includes Lloyds TSB, Bank of Scotland, Halifax and Cheltenham & Gloucester – views investment products such as endowments and equity Isas as better longer term vehicles with which to settle an interest-only mortgage.