Skipton Building Society has unveiled a new interest-only mortgage range and has cut rates on many existing residential mortgages. The new interest-on
Skipton Building Society has unveiled a new interest-only mortgage range and has cut rates on many existing residential mortgages.
The new interest-only range is available at 60, 70 and 80 per cent LTV to house purchase and remortgage customers.
The purchase range includes a fee-free two-year fix at 1.66 per cent to 60 per cent LTV.
The lender has also brought in a 1.33 per cent loan to 60 per cent LTV with £1,495 completion fee and 1.79 per cent to 80 per cent LTV option with £1,495 completion fee.
Five-year fixes include a fee-free 2.25 per cent to 60 per cent LTV and 2.29 per cent to 80 per cent LTV with £1,495 completion fee.
The interest-only purchase range also has free valuations.
The interest-only remortgage range includes a fee-free two-year fix at 1.79 per cent to 60 per cent LTV and 1.46 per cent to 70 per cent LTV with £1,495 completion fee.
The five-year remortgage fixed range includes a fee-free 2.24 per cent to 60 per cent LTV and 2.21 per cent to 80 per cent LTV with £1,495 completion fee.
This range has free valuations and standard legals.
The lender has made several changes to its interest-only residential lending criteria.
These include removing the £500,000 loan cap, with standard maximum loan limits now being applied.
The lender has also allowing the sale of the mortgaged property as a repayment strategy.
This is possible where a minimum of £400,000 of equity exists within the property, providing the sale of property element is no greater than 50 per cent LTV.
If the overall interest-only loan is above 50 per cent LTV, additional repayment methods can be used alongside selling the house up to 70 per cent LTV interest-only or 80 per cent part and part.
Skipton is also allowing up to 15 per cent of homeowners’ projected pension pot to be used to pay off the mortgage, where the pot is set to be worth at least £400,000.
Skipton director of intermediary relationships Paul Darwin says: “At Skipton we recognise that there is a place for interest-only in the market as long as borrowers have a defined exit strategy to repay the loan.
“We are taking an appropriate and responsible approach to this type of lending.
“Our latest lending policy changes are a reflection of this and provide greater choice to borrowers looking at this route.”