A further tightening of Interest Only policy from Lloyds / Halifax

The following communication was received by email yesterday:

"We would like to update you on a planned change affecting the way in which Halifax Intermediaries processes Interest Only mainstream mortgage applications.

With effect from Tuesday 31 May, all new Interest Only (including part and part) mortgage applications will require evidence of the repayment plan that the customer wishes to use in order to proceed to offer stage. Only if the evidence meets our criteria and covers the full amount requested on an Interest Only basis can a mortgage offer be produced.

Please note that existing customers are also now required to provide a copy of evidence of a suitable repayment plan if they want to convert all or part of their mortgage from Repayment to Interest Only. Once received, this evidence will be checked against our list of acceptable repayment vehicles and the mortgage account will then be transferred to Interest Only.

As a responsible lender, we believe that it is necessary to ensure our borrowers have an appropriate repayment strategy in place to pay off the mortgage balance at the end of their term".