Remember self-cert mortgages, the home loans that allowed applicants to self-certify their incomes? Also known as liars’ loans, they led to a lot of fraud, defaults and repossessions when banks imploded 12 years ago (Patrick Hosking writes).
Now we have self-cert mortgage holidays. Borrowers don’t have to provide any evidence that they are in difficulties before being allowed to pause their payments. Many are taking advantage of these holidays to defer relatively cheap mortgage repayments and are using the cash saved to pay off expensive credit card debts instead.
This makes judging the important question of stress among mortgage borrowers hard to gauge — and that is crucial for One Savings Bank, which has an £18.5 billion book of buy-to-let and other specialist mortgages.
