The Co-op launches campaign for interest only mortgage customers
The Co-operative Bank is waiving fees and launching a major campaign to increase the number of interest only mortgage customers with a repayment strategy in place.
In a unique move for the industry, the campaign goes above and beyond recommendations outlined in the Mortgage Market Review, which indicated that lenders should communicate with interest only customers at least once during the lifetime of their mortgage.
Interest only mortgages, where the borrower only repays the interest on their loan and not the capital, accounted for a third of all mortgages being taken out prior to the financial crisis. According to figures from the FSA an estimated £120 billion of interest-only mortgage loans are due for repayment over the next 10 years. To encourage any of its customers who may be worried about repaying the capital at the end of their interest only mortgage to take action, the bank is waiving all fees for customers who extend their mortgage term or switch to repayment.
In addition to this, The Co-operative Bank has launched a major communications campaign to thousands of interest only customers, targeting all those who have ten years remaining on their mortgage term to make them aware of the options and support available to them. This forms part of a wider communications programme designed by the bank to engage with customers at all touch points throughout the life of their mortgage.
James Hillon, Head of Mortgages at The Co-operative Bank said: "Wherever possible we look to invest in initiatives that help our customers to manage their finances more effectively.
"We've already withheld the interest for customers holding our agreed overdrafts for three months and launched a new ISA range to reward the loyalty of those who already bank and save with us. By launching a regular communications programme and removing the fee for interest only mortgage customers who switch to repayment or extend their term we want to encourage those who are worried about repaying their loan to take action."