Bank retracted interest only offer

E

evi3

Registered User
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Hi a colleague of mine just got a mortgage and was waiting on his cheque having completed all the forms etc when the bank rang and said they are retracting the interest only for 2 years, can they do this? This is what swayed him to go with this bank in the first place as their rates were not the most competitive. Do you have any advice?
 
What do the terms & conditions of the loan offer (approval in principle?) say? I would imagine that the lender always reserves the right to alter or withdraw a loan offer before it is drawn down. The person in question might also ask their solicitor for his/her opinion.
 
I was talking about this very thing to a mortgage broker last week and he said the interest rate and terms and conditions of a mortgage can be changed right up to the minute the loan is drawn down .
 
Hello,

In regards to your query, most banks now include clauses in their Mortgage Letters of Offer, empowering them to amend the mortgage interest rate prior to the mortgage drawdown.

My advice to your friend would be to look at other lender options in the market.

While the Irish Mortgage Market landscape is changing rapidly, a number of the main lenders will still consider interest only options for anything up to the first 3 years of the mortgage.

One thing I would say is that the Loan to Value ratio (mortgage v's house value) will impact on a banks decisions to grant interest only faciltites. The lower the mortgage to the value of the house, the more confident the bank is with the lending.

I hope this is of assistance,

Alan Dolan
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