Leeds Building Society has increased its maximum interest-only loan-to-value from 50% to 60%.
The criteria change applies to the society’s range of interest-only and part and part mortgages – where part of the loan is interest-only and part capital repayment.
For borrowers planning to sell their property as a repayment strategy minimum equity requirements now take into account regional variations on property values – with Leeds switching to a more manual focus when assessing affordability and a borrower's repayment strategy.
Richard Fearon, Leeds Building Society’s chief commercial officer, said: “We believe our interest-only proposition is unique in the market for the combination of lending criteria.
“The changes we’ve made are intended to help more borrowers who are not well-served by the wider market as we respond to borrowers’ and intermediaries’ feedback innovatively and responsibly.
“Refining and improving our interest-only lending criteria is a way we can do this, to achieve our purpose to help more people to have the home they want.
“Our interest-only deals come with a range of fee and incentive options – we know the fees assisted part and part products have been particularly popular with homeowners looking to remortgage from existing interest only loans.
“Part and part can offer borrowers more flexibility in reducing their mortgage debt in a manageable way, when they have an endowment shortfall, for example. It also can suit borrowers whose salary is expected to rise, such as through professional qualification.”
In 2017 an increased number of borrowers are expected to see their interest-only mortgages reach maturity.
Leeds does not impose minimum income requirements on its range, while its part and part mortgages are available to 75% LTV.
