UK-based Co-operative Bank has increased the interest rates for borrowers who claimed mortgages through its ‘Owhhome’ scheme during the period between 2008 and 2010, according to The Telegraph.
Launched in 2008, the government-backed Ownhome scheme was formed to help first-time buyers for their property deals.
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Co-operative Bank, which initially offered the mortgages at low interest rate of 4.29% for two-year fixed, is now refusing to remortgage under the same low rate, instead offered it based on its standard variable rate of 4.74%.
Co-operative Bank spokesman was quoted by the news agency as saying that Ownhome is fundamentally a shared equity mortgage.
"Although we no longer offer this type of mortgage, customers are not restricted from remortgaging elsewhere, as shared equity mortgages are available from some other lenders in the market," the spokesman added.
UK-based London & Country mortgage broker, David Hollingworth, told that it could still prove very tricky to switch to another provider, as it is all down to the lender’s discretion, which is by no means easy for such a unique scheme.
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By GlobalDataThe Co-operation bank has provided around 2,500 equity loans though Ownhome and estimates 2,000 of them to be still active.
