Leeds criteria changes aid interest only borrowers
Improvements to its interest only mortgage range are enabling Leeds Building Society to help more under-served borrowers.
The Society has continued to improve its lending criteria on part and part interest only mortgages and will now accept sale of property as a repayment strategy up to 75% LTV (loan to value).
There has been strong demand for the Society’s award-winning part and part interest only mortgages since their launch in 2015.
The products are available up to 75% LTV, with a maximum of 50% on an interest only basis and the remainder on a capital and repayment basis.
Leeds Building Society is unique among interest only lenders in not imposing minimum income requirements and now calculates the minimum equity of £150,000 based on the borrower’s term end position.
“We always try to be responsive to borrowers’ and brokers’ feedback and have kept our criteria under review since we launched part and part interest only mortgages almost a year ago,” said Martin Richardson, Leeds Building Society’s Director of Business Development.
“These latest changes are part of how we’ve further refined and improved criteria since we brought this award-winning product to the market.
“As anticipated, part and part has been particularly popular for remortgages as it offers borrowers currently on full interest only the flexibility to start paying down their loan in a manageable way.
“Part and part reduces the payment shock of moving to a full repayment mortgage for homeowners who’ve yet to reduce the capital they owe, because of an endowment shortfall, for example.
“It’s also relevant to high net worth borrowers, who are looking to use an interest only mortgage as part of a wider investment strategy, or for home buyers who can expect their future income to rise significantly, such as when they complete professional qualifications.”
As a responsible lender, Leeds Building Society assesses affordability for all borrowers on the basis of a full capital repayment mortgage.