Interest only mortgages - how to pay back capital?

[maggiethecat]

Seems like the rules have really tightened up. Previously we remortgaged on an interest only deal and there was no requirement to show how we planned to pay off capital at term end. We want to do it again and although the property which we want to remortgage is an investment rather than our own residence, we have been told by C&G that we need to show evidence of investments being in place to repay the capital. Things accepted - ISAs, pensions, endowments.
Is this the general position with lenders atm? or, for an investment property, I wonder if there are any lenders where the requirements are not so strict?

We were looking into this with The Woolwich recently and were told that we needed to show a plan of how the capital was to be repaid. Selling the house was an acceptable plan for repayment, so they didn't need to see our investments or anything similar. My parents have an old interest only mortgage with C&G and, now their endowment (remember them) has matured, have chosen to keep it on as interest only and use the endowment money for themselves - apparently dying is an acceptable plan to repay the C&G in the future!

ok fishyfairy, I'll call them up and ask directly if selling the property is acceptable - I hope it is.

It should be, at least with a rental property, as you don't need it as your home!

I know - that's why it surprised me and I wonder if the lending industry has just gone bonkers!

Quite possibly