Fixed rate and Offset Interest-only products
Our Interest-only product range includes Fixed rate and Offset mortgages that could be a great choice for many of your residential clients.
There’s no minimum income requirement, but your clients will need to meet our lending criteria and the same affordability requirements as if they were applying for an equivalent repayment mortgage. They’ll also need to demonstrate they have an acceptable repayment strategy.
If your client took out their residential Interest-only mortgage with us before September 2020, we apply a different policy. View our policy for existing Interest-only clients >>
Your clients will need to meet the following criteria to apply for one of our Interest-only mortgages, including having an acceptable repayment plan which is based on current rather than estimated future value.
Here’s an overview:
- No minimum income requirement, but your client must have sufficient income to support an equivalent repayment mortgage and meet our repayment affordability checks
- A maximum of 50% LTV
- A minimum of £300,000 equity left in the property after the mortgage amount required has been taken into account
- An acceptable repayment strategy.
Acceptable forms of repayment:
We’ll need to see evidence of an acceptable repayment plan. These are based on current value, not projected forecasts.
- Sale of investments:
- 80% of the current value of the investment vehicle – FTSE, Unit Trusts, Open-Ended Investment Companies, S&S ISA
- 100% of the current endowment statement value.
- Pension lump sum:
- 12.5% of the current statement value of a defined contribution pension scheme
- 50% of the guaranteed lump sum due from a defined benefit pension scheme.
- Sale of property:
- 60% of the current value of an unencumbered second property
- 50% of the current value of the property to be mortgaged.
Please note: An Interest-only loan on an Interest-only specific product cannot be used for debt consolidation.
