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Melton Mowbray tightens interest-only policy

Written by: Samantha Partington
Melton Mowbray Building Society has tightened its interest-only mortgage policy due to the high volume of applications it has received for this repayment type.

The option to take a mortgage on an interest-only basis has been withdrawn from the main range and introduced on one newly created product with a maximum loan-to-value (LTV) of 60%.

The rate is 1.4% discounted off the society’s Standard Variable Rate for the term of the mortgage making the current pay rate 3.59%. The product carries fees of £199 on application and £599 on completion.

Martin Reason, chief executive of the Melton, said:

“The Melton has amended its pricing structure to slow down application flow for interest-only mortgages. “The new standalone 1.4 % discount for term product is available to all customers who require an interest-only option and who meet our lending criteria.”

Reason said the decision to tighten its policy was not related to the more stringent repayment strategy rules in the Mortgage Market Review (MMR). “Our underwriting has always been very straightforward and required little change following the introduction of MMR,” he added.

“The change has been introduced to ensure that we continue to be able to offer customers the opportunity to choose their mortgage payment strategy.”

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