Interest-only criteria relaxed by Leeds Building Society
Leeds Building Society has announced it will now accept sale of property as a repayment strategy up to 75% LTV (loan to value) on its part and part interest-only product range, to enable it to help more under-served borrowers.
The products, launched last year, 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 will now calculate the minimum equity of £150,000 based on the borrower’s position at the end of their mortgage term.
“We always try to be responsive to borrowers’ 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.
“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.”
Leeds Building Society assesses affordability for all borrowers on the basis of a full capital repayment mortgage.