Oakwood joins Edeus in paying borrowers to leave

Another mortgage company is prepared to pay its customers to take their business elsewhere.

Oakwood Global Finance, which specialises in buying residential mortgages from other lenders, is offering a 15% discount to certain customers who can redeem their home loans, either by remortgaging or from their own funds.

In addition, the firm’s usual early repayment charge and £120 exit fee will be waived for those taking up the offer.

Oakwood is attempting to reduce its exposure to the UK property market as house prices fall, but the market for mortgage-backed securities remains frozen by the credit crisis.

In current market conditions, companies such as Oakwood are faced with refinancing difficulties or the prospect of selling mortgages at a loss and the scheme should provide a greater inflow of cash than if the loans were sold on to investors.

Last month, one-time sub-prime lender, Edeus, took the unusual step of offering certain customers a similar cash-back deal.

The firm offered an 8% discount to selected borrowers who were prepared to pay off their loans in full.

In the case of the Oakwood offer, the 250 customers who are eligible for the discount will be contacted Engage Credit.

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