Mortgage restrictions ‘may lead to debt difficulties’

Restrictions placed on mortgages could leave some people at a financial disadvantage.

Independent financial research from Defaqto has shown that ov…

Restrictions placed on mortgages could leave some people at a financial disadvantage.

Independent financial research from Defaqto has shown that over a quarter of mortgages available are restricted to the lender’s existing customers.

Kevin Bray, insight analyst for banking at the organisation, reported a “noticeable move” by the major lenders to offer deals solely for their current account holders.

The industry expert said: “The banks are clearly keen to further their ambitions of becoming one-stop shops for all their customers’ personal financial product needs.”

He added that special mortgage offers for their existing customers is part of this strategy, with some even reducing fees and permitting higher loan-to-value borrowing than their standard range.

The study revealed the number of mortgage products available has increased to 2,948 from 1,686 in July 2009.

In its latest Quarterly Economic Bulletin, the Association of Mortgage Intermediaries suggested the budget deficit will continue to drive up the cost of mortgage lending.

By Joe Shervin

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