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Natalie Holt
Homeloan porting hit by interest-only clampdown
Brokers have warned that the clampdown on interest-only deals is hitting borrowers’ ability to port their mortgage and risks stifling the market.
Several lenders have restric-ted their interest-only criteria after the FSA proposed tighter controls in its mortgage market review. Brokers say the changes are now starting to bite.
Chadney Bulgin director of mortgages Jonathan Clark says: “The inability to port is going to stifle the market. Borrowers believe if they have a portable mortgage, lenders will grant the new mortgage to them automatically on the same terms. But they do not understand when you port a mortgage, you have to give one up and reapply. With lenders applying stringent criteria on the reapplication, borrowers are being caught out.”
Chartwell Funding managing director Robert Winfield says: “It is disappointing there are some lenders that are trying to use new criteria on old loans. As far as I am concerned, borrowers port the terms and conditions of their loan, not just parts of it.”
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