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Housing gloom grows as Co-op pulls interest only mortgages
THE CO-OPERATIVE Bank has become the first major lender to pull its interest only mortgages.
It said demand for the product had dropped because of falling house prices and “uncertainty” over interest rates. New customers will only be able to take mortgages on a capital and repayment basis from Tuesday.
James Hillon, Co-op Bank head of mortgages, said buyers are “taking a long term view to home ownership”.
Other lenders including Santander and Nationwide have tightened restrictions on interest only mortgages this year.
The Co-op’s changes, which do not affect existing interest only mortgage customers, also apply to Britannia and its Platform intermediary service.