New products include a 2 year interest only offer with a rate of 1.6% up to 50% loan to value (LTV), as well as a 2 year fixed rate part-and-part interest only mortgage, available at 1.7% up to 75% LTV.
All of these products now come with a free standard valuation up to £999, as well as fees-assisted legal services available for standard remortgages and a £1,999 fee.
This is aimed in particular at high net worth borrowers looking to secure an interest only mortgage as part of a wider investment plan, or for homebuyers expecting their future income to rise in the near future – after completing a professional qualification, for example.
This follows previous releases in 2015 from Leeds Building Society, where the lender decided to offer new interest only mortgages up to 50% LTV and introduce part-and-part mortgages up to 75% LTV, with 50% LTV on interest only and the remainder on a capital and repayment basis.
Leeds Building Society is not the only lender to have updated its interest only mortgage offering in recent months, however, with Virgin Money also changing its interest only policy in March this year. The lender decided to halve the minimum gross income requirement for interest only mortgages on residential deals, from £100,000 to £50,000, as well as removing the requirement for the property to be worth at least £500,000.
A maximum loan to income multiple of 3.5 for borrowers on either interest only or part-to-part deals was also introduced by the lender, which includes 100% of bonuses and overtime payments, in a bid to guarantee stronger affordability amid loosening criteria. The maximum loan to income for interest only mortgages with Virgin Money on residential properties, currently stands at 70%.