Leeds Building Society will now accept sale of the property as the repayment strategy on interest-only and part capital repayment mortgages up to 75% loan-to-value.
Leeds Building Society will now accept sale of the property as the repayment strategy on interest-only and part capital repayment mortgages up to 75% loan-to-value.
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 does not impose minimum income requirements and now calculates the minimum equity of £150,000 based on the borrower’s term end position.
Martin Richardson, Leeds director of business development, 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.
“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.
“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.”
Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, said: “It was always acceptable to use the sale of a property under the Mortgage Market Review rules, it just has to be credible as a repayment strategy.
“That usually means having enough equity to buy somewhere else and clarity that this is understood by the borrower and will work in practice.”
Leeds assesses affordability for all borrowers on the basis of a full capital repayment mortgage.
