US bank Morgan Stanley has been criticized in a report over the lending ethics of its UK mortgage unit Advantage, which a newspaper claims is lending consumers over six times their joint incomes.
The report in the Mail on Sunday found that the lender was offering an interest-only loan of up to 6.4 times joint salary – three or four times more than the amount most lenders are prepared to offer. The lender was also offering more on its interest-only mortgage than on its repayment deal, despite the risk in taking an interest-only mortgage.
Eight major lenders contacted by the newspaper, including Abbey, Nationwide and Halifax, said that they would not lend more on interest-only deals, with most calling the practice irresponsible.