Clydesdale Bank offers new approach to Interest Only mortgages

Clydesdale Bank is introducing changes to its mortgage range that will see it take an innovative approach to Interest Only mortgages, it has announced today.

The changes, which take effect from 21st January, will see the launch of a unique mortgage product and a rationalisation of how interest only mortgages are offered by Clydesdale Bank.

The new product, available from Monday (21st January), is called the "Low Start Mortgage", and combines the lower payments of Interest Only with the long-term security of Repayment (capital & interest). Borrowers take a mortgage with an initial 3-year fixed rate loan on Interest Only terms, at the end of this the loan reverts to Standard Variable Rate on Repayment terms for the remaining life of the mortgage.

The Low Start Mortgage addresses a need within the market, while appreciating the need to ensure repayment of the capital. Recognising the unique and quite specific nature of the Low Start Mortgage, it will be launch to the mortgage broker market only in the first instance.

Fred Sharp, head of mortgage distribution at Clydesdale Bank, said; “There is a clear need for interest only mortgage products in the marketplace, but this has to be in the right circumstances and with the right support- financially and advisory.

“Our new approach addresses both the need and the concerns associated with Interest Only mortgage lending; we have retained the option while controlling the availability, and launched a new product that takes the best of both interest only and repayment mortgages to support borrowers looking for a new home.”

For more information, visit cbonline.co.uk.