We understand that interest only and part and part loans can be a suitable repayment method for a wide range of customers who can demonstrate confidence in repaying their loan at the end of its term, through a clear and evidenced repayment plan.

We have reviewed our interest only policy for residential mortgages and made the following changes:

  • We have introduced a maximum loan to income multiple of 3.5 for interest only and part and part loans, based on our usual allowable income, to ensure strong affordability.
  • We have reduced our minimum income requirements from £100,000 to £50,000. This is based on total gross income i.e. including 100% of additional income such as bonuses, overtime etc.
  • Finally, as a result of these changes, we have removed our requirement for a minimum property value of £500,000.

When will these policy changes take effect?

Our new policy applies to any interest only or part and part Decision in Principle (DIP) with immediate effect. Any DIP which has already been approved based on our existing policy will be honoured if converted to a full application within the usual 90 day validity period.

Want to know more?

Here’s a reminder of the other key features that make up our interest only lending policy:

  • The maximum LTV for residential customers taking a mortgage on an interest only basis or the interest only element of a part and part mortgage is 70%.
  • We do not currently offer interest only mortgages to first time buyers.
  • Capital raising for debt consolidation is not permitted.
  • At least one repayment strategy must be in place to cover the balance of the loan at the end of the mortgage term in the name of the applicant(s), and it must be substantiated with documented evidence.

Existing customers 

For your existing Virgin Money customers who have an interest only or part and part mortgage and are looking to move home or borrow additional funds, please contact your dedicated Business Development Manager or our Intermediary Relationship Support team on 0345 600 1516* to discuss the options available to them.

What else do you need to know?

Our existing lending policy for BTL interest only loans remains unchanged.