Last week we told you about the changes to our lending criteria for part and part interest only customers using sale of the mortgaged property as their repayment vehicle.
A reminder of these changes:
- For part interest only sale of property with part capital and interest, the £150,000 minimum equity requirement will be calculated on the equity at the end of the mortgage term.
- For pure interest only with sale of property there is no change and the £150,000 will still be based on the deposit/equity at application.
If you have any clients who are looking at a part interest only option this recent change could benefit them.
To help you understand these changes here are examples from before and after the change:
Example – Previous policy £600,000 purchase
| £150,000 equity at outset = deposit at start of term |
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Example – New policy £300,000 purchase
| £150,000 equity at maturity = deposit + capital and interest repaid at end of term |
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As a result of this change your clients could use part and part interest only where they have a lower deposit amount since the £150,000 minimum equity requirement will be calculated on the equity at the end of the mortgage term.
Please call your dedicated contact and they can explain these changes in more detail and to discuss our interest only proposition.
