The interest-only mortgage squeeze

James McKeigue reports on how borrowers on interest-only mortgages are facing a tough time, plus a round-up of the rest of the week's personal finance news

Borrowers on interest-only mortgages are facing a tough time as banks respond to new regulations from the Financial Services Authority (FSA). Lloyds, Halifax, Barclays and Santander are all tightening the criteria they use to judge how customers will repay their loans.

One of the most controversial moves is Barclays' announcement that it will no longer assume that stocks and shares Isas will return any growth for interest-only mortgage holders. Meanwhile, Santander has doubled the deposit required for new interest-only mortgages to 50% from 25%. That's expected to prevent more than 300,000 of its customers from re-mortgaging.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
James McKeigue

James graduated from Keele University with a BA (Hons) in English literature and history, and has a certificate in journalism from the NCTJ. James has worked as a freelance journalist in various Latin American countries.He also had a spell at ITV, as welll as wring for Television Business International and covering the European equity markets for the Forbes.com London bureau. James has travelled extensively in emerging markets, reporting for international energy magazines such as Oil and Gas Investor, and institutional publications such as the Commonwealth Business Environment Report. He is currently the managing editor of LatAm INVESTOR, the UK's only Latin American finance magazine.