Interest only mortgage criteria expands

CONTACT CHRIS

Scottish Widows Bank has revealed it will be widening criteria across its interest only mortgage options, allowing borrowers to now use the sale of a main property as a repayment vehicle.

Available to borrowers with an income of over £100,000, a loan to value (LTV) that doesn’t exceed 50% and at least £200,000 equity in the property, this policy comes as part of the lender’s efforts to improve flexibility for its customers.

No higher product fees will be applied to customers using this option and all products in the 50% LTV bracket are available.

This follows the likes of Virgin Money to have expanded interest only lending options, with Virgin Money dropping its minimum income requirement from £100,000 to £50,000 in March, in response to increasing demand for interest only on the market, and they are not the only lenders to have continued to do so.

Hinckley & Rugby Building Society will now be offering borrowers an interest only payment option across its total range of residential mortgage products.

Pure interest only is available up to 60% LTV, while part interest only can be accessed up to 80% LTV, or for a part repayment combination.

The lender also announced there would be no minimum income requirement for this option, however, the only acceptable repayment vehicle is the sale of another property or properties, in the same name of the applicant, which must have sufficient equity to repay the new loan.

Finally, Saffron has launched an interest only occupational range, which now offers borrowers the option to repay their mortgage on an interest only basis. The lender’s occupational range includes loans for self-employed individuals, contractors and professionals, with all interest only deals available up to 70% LTV. In line with this, the minimum age of an applicant has now been reduced to 21 across all products, while the maximum loan for first time buyers has increased from £500,000 to £1 million, up to 90% LTV.