View more on these topics

Lloyds introduces spot-checks for interest-only mortgages

Lloyds Banking Group will conduct spot checks at random on brokers submitting interest-only cases and ask them to supply evidence that the client has an appropriate repayment vehicle in place from October 15.

In May, Lloyds reviewed its interest-only lending policy, declaring that it would no longer accept selling a main residence as a repayment method for interest-only loans and required proof of a person’s ability to repay the capital element of the mortgage.

It concluded acceptable repayment vehicles for interest-only mortgages are endowments, pensions, Isas, share portfolios or a lump sum.

The sampling will be conducted after the offer stage.

If the broker does not provide the documentation, Lloyds will contact the client directly.

A spokeswoman says: “In May, the Group announced that it has conducted a strategic review of interest only lending. We are now looking to implement the change that we communicated in May – introducing random sampling, enabling us to ensure the existence of an appropriate repayment vehicle.”

Recommended

Active plan works for Fidelity growth

The manager of Fidelity’s multi-manager growth fund prefers actively managed funds to passive funds as most of the fund’s returns are generated by manager selection rather than asset allocation. Fund manager Ayesha Akbar says around 70 per cent of the returns from Fidelity multi-manager growth are generated by manager selection and the remainder come from […]

Russell Investments bolsters UK IFA team

Russell Investments has appointed Danny Callaghan as head of UK IFA sales within its UK private clients services investment team. Callaghan joins from Montpellier Asset Management where he was a partner. He was responsible for transforming the firms business model for the RDR. Prior to this he was a sales director at Zurich Financial Services. […]

Consumers should know difference

Re the articles in last week’s MM headlined, Just 31% of public say they’ll pay for advice, and, 95% of staff want advice on retirement, leaving aside the old Spike Milligan adage that 74.3 per cent of statistics are made up on the spot, what are we to read into these numbers? Could it be […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. ‘Lloyds in shutting stable door once interest only has bolted’ shocker…

    I notice there’s no mention of how long Lloyds used the facility of pure interest only to build up lending business in the last 10 years??

    LTSB/C&G were quite happy to take the business then.

    Would love to be a fly on the wall when those clients get invited in for a ‘review’.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com