Skipton offers a new range of interest-only mortgages

Skipton Building Society has introduced a range of interest-only mortgages to help people on the property ladder.  Skipton Building Society has i

Skipton Building Society has introduced a range of interest-only mortgages to help people on the property ladder. 

Skipton Building Society has introduced a range of interest-only mortgages to help people on the property ladder. 

The new range provides 60 per cent, 70 per cent and 80 per cent loan-to-value products, which are available to purchase and remortgage customers.

The purchase range offers free valuations and includes a fee-free 2-year fix at 1.66 per cent on 60 per cent LTV, 1.33 per cent on 60 per cent LTV with £1,495 completion fee and 1.79 per cent to 80 per cent  LTV with £1,495 completion fee. 

Five-year fixes include a fee-free 2.25 per cent on 60 per cent LTV and 2.29 per cent on 80 per cent LTV with £1,495 completion fee.

The interest-only remortgage range, which offers fee-free valuations and standard legals, includes a fee-free 2-year fix at 1.79 per cent on 60 per cent LTV and 1.46 per cent on 70 per cent  LTV with £1,495 completion fee. The 5-year fixed range includes a fee-free 2.24 per cent on 60 per cent and 2.21 per cent on 80 per cent LTV with £1,495 completion fee. 

The society has also enhanced its policy for interest-only residential lending. The maximum loan of £500,000 for interest-only deals has now been removed, with standard maximum loan limits now being applied. 

The enhanced policy for interest-only residential lending is also available for those who want Skipton Bespoke. The society launched this for customers looking to borrow more than £1m.

 Provider view 

Paul Darwin, Skipton’s director of intermediary relationships, said: “At Skipton we recognise that there is a place for interest-only [deals] 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.”

 Adviser view 

Carl Shave, IFA at Suffolk-based Just Mortgage Brokers, said:  “The new Skipton interest-only range offers a competitive selection of rates across the market. Pricing their products keenly in an environment that presents a reduced selection of lenders when interest-only as a repayment vehicle is a requirement, is pleasing to see. 

 “Although interest-only still looks to remain a niche product in the mortgage market, it has a very valid place for certain borrowers, where this will continue to be a suitable repayment plan.   

“Clients with income sources such as the self-employed, or employees who receive bonuses, can still demonstrate valid reasons as, too, can those with future downsizing plans. Ultimately, interest-only carries risk to lenders and borrowers alike. 

“However, with improved lender understanding and good advice given to borrowers, it can continue to have a valid place in the market and one where I will still continue to recommend where relevant.”

 Charges 

Mix of fee and non-fee.

Verdict 

Although it is true that interest-only mortgages can be risky, there is still clearly a niche demand for them.  

Go to Source

COMMENTS