Interest-only mortgage increase 'could hinder first-time buyers'
Halifax's interest-only mortgages, which are popular with first-time buyers, have become more expensive.
According to the Times, the UK's largest mortgage lender is introducing new fixed-rate deals including higher charges for borrowers paying off the interest on a home loan.
first-time buyers are expected to be affected by the move, which is currently limited to mortgages arranged through brokers.
David Hollingworth of broker London and Country told the publication it was a significant step towards a "two-tier system" and that house buyers could face significantly higher rates.
Fellow brokers John Charcol had already urged borrowers using interest-only deals to urgently review their arrangements as it could be the equivalent of renting a house with the banks acting as landlords.
With the news that interest-only options with Halifax are to become more expensive for potential house buyers, more people may be encouraged to look for property to rent in the London borough of Redbridge, or elsewhere in the UK, instead.
By Andy Britten
Published 15th April, 2010
© 2010 Estates IT Limited
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First-time buyers may be upset by news that a leading mortgage lender is increasing the price of its interest-only option and it may encourage more people to look for property to rent in the London borough of Redbridge, or elsewhere in the UK, instead.