Leeds BS eases interest-only criteria

Leeds Building Society has eased its interest-only criteria and will now accept sale of property as a repayment strategy up to 75% LTV.

The society said it has been strong demand for its award-winning "part and part" interest only mortgages since 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 claims to be unique among interest-only lenders because it doesn't impose minimum income requirements and now calculates the minimum equity of £150,000 based on the borrower’s term end position.

Director of business development Martin Richardson said: “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.

“These latest changes are part of how we’ve further refined and improved criteria since we brought this award-winning product to the market.”

Richardson said “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.”