Interest Only – maximum loan amount
We have removed our £1.5m cap for residential Interest Only lending. There is now no maximum loan amount for interest only mortgages. Subject to maximum LTVs and individual product limits.
Maximum LTVs
We have increased the maximum LTVs available for large loans.
We are now able to consider a LTV of up to 80% for loans over £750k up to £2m – 75% LTV may be on an Interest Only basis with any additional lending on a Capital & Interest basis.
The Maximum LTV for loans over £2m up to £3m has been increased to 70% (65% Interest Only) and we can consider loans over £3m up to 60% LTV (55% Interest Only).
New Residential LTV Limits
| Loan Amount | C&I | I/O |
|---|---|---|
| £750,001 – £2,000,000 | 80%* | 75% |
| £2,000,001 – £3,000,000 | 70% | 65% |
| Over £3,000,000 | 60% | 55% |
*Where the mortgage is both over £750K and 75% LTV, Interest Only is only available for properties in London & South East England.
Downsizing with Large Loans
For loans where the total amount is over £1.5m, downsizing is now limited to 60% LTV. Any lending over 60% (up to the maximum LTV and within product limits) must either be on Capital & Interest or be supported by an additional repayment vehicle.
For example, a £1.8m residential Interest Only loan on a £2.4m property would be eligible for a maximum £1,440,000 using downsizing (60%) and the remaining £360,000 would require the use of an additional repayment vehicle (e.g. sale of another property) or the £360,000 could be placed on C&I.
This policy does not apply to Interest Only loans where the total loan amount (C&I +IO) is under £1.5m.
In addition to standard packaging requirements, we continue to require 2 months bank statements for all cases above £1m.
