We can provide a solution for your clients who require an interest only mortgage, with a variety of different acceptable repayment strategies, and the ability to be utilised in conjunction with offset. All supported by our common sense approach to lending.
Maximum of 85% LTV - with a maximum interest only element of 75% LTV
Interest only is available on our range of offset products
A range of acceptable repayment strategies including downsizing and sale of other UK properties
Your clients must meet the following criteria:
The maximum LTV for the interest only element is 75%. We can consider up to 85% on a part interest only part repayment basis but the interest only element must not exceed 75%.
Interest only borrowing for debt consolidation is not permitted.
Interest only borrowing is not permitted if the term of the mortgage goes beyond your clients stated retirement age or age 70, whichever is sooner. The term can only exceed your clients stated retirement age or age 70, whichever is sooner where income is not required to make the loan affordable.
Your client must have an acceptable repayment strategy in place to repay the loan at the end of the term.
Your client must provide evidence of their repayment strategy during the application process.
This can be used to cover up to a maximum of 60% of the value of the property.
Total borrowing can go to 85% LTV (a maximum of 75% can be on Interest Only) by using an additional repayment strategy or borrowing on a Capital Repayment basis.
The property must have a minimum equity of £250,000 at the time of application for non London properties and £300,000 for properties located in London. To check if the property meets our definition of London please enter the postcode here.
Sale of other UK property
A maximum of 75% of the equity in the property can be used as your clients repayment strategy.
The property must be in located in the UK.
The property must be in your clients name/s only with no other parties named.
Evidence required If any property is mortgaged by another lender, a copy of the latest mortgage statement.
Pension Lump Sum
For defined contribution schemes and Self Invested Pension Plan (SIPP) – A maximum of 60% of tax-free lump sum (15% of total pension pot) can be used towards your clients strategy
For defined benefit schemes – A maximum of 90% of the tax free lump sum can be used towards your clients strategy.
The full mortgage term must take your client beyond the age of 55 and your clients declared retirement age must be at or before the end of the term of the mortgage.
Evidence required Latest Pension Statement.
The current value of the savings must cover 100% of the I/O element. The total can include eligible investments referred to below.
The savings must have been held for a minimum of 12 months.
The savings must be in pounds sterling.
Evidence required Latest savings statement.
The projected mid-point maturity value must cover 100% of the interest only borrowing.
The endowment must have been in place for at least 12 months.
The end of the endowment term must not exceed end of mortgage term.
It must be a UK policy provided by a regulated firm.
Evidence required Latest endowment policy statement, dated in the last 12 months.
The current value of the investments must cover 100% of the I/O element of the mortgage. The total can include eligible savings referred to above.
The investments must be in pounds sterling.
The investment must have been in place for a minimum of 12 months
Evidence required Stocks and Shares ISA, Unit Trusts/OEIC, Investment Bonds: Copy of latest statement and/or Stocks and Shares ISA: Copy of share certificates/statements containing evidence of share-holdings and their valuation.
Interest only postcode checker
Check the equity that is needed for your client’s interest only mortgage, if they plan to sell the property as a repayment method.
This will differ if the property is in London or outside it.