Home owners offered 'golden goodbyes'

Published on Friday 12 June 2009 20:14

BORROWERS are being offered "golden goodbye" deals by two lenders to encourage them to remortgage elsewhere.

GMAC-RFC and Advantage Home Loans, the UK mortgage arm of investment bank Morgan Stanley, both closed to new business last year, and are now offering to pay borrowers a large chunk of their loans if they remortgage with a different lender.

GMAC RFC, which prior to the credit crunch had been among the UK's largest subprime lenders, said it had contacted around 300 customers with the offer.

Jeff Knight, director of marketing at GMAC-RFC, said: "We are trying to get their LTV down to about 80 per cent. We are not targeting those with LTVs of 125 per cent. It will help people who want to remortgage and help free up some of our funding."

GMAC-RFC borrowers considering the initiative are being referred by the lender to broker London & Country.

The Advantage offer is believed to be along similar lines, with some borrowers paid up to 15 per cent of their loan to move elsewhere.

Bradford & Bingley, now owned by Santander, is taking a slightly different approach by waiving its early redemption charge for borrowers selling their property or moving to a different lender. The offer, introduced in February, closes at the end of this month.