Nationwide Building Society is expanding its line of interest-only mortgages, which are available through brokers, to purchase applications to give homeowners more flexibility.
This follows the company’s re-entry into the residential interest-only mortgage market in April of this year after an eight-year absence.
Interest-only loans will be offered for purchase and re-mortgage at a maximum of 60% LTV and will require a minimum principal of £ 300,000 in London, £ 250,000 in the South East and £ 200,000 in the remainder from the United Kingdom.
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The rates on the company’s interest-only products are the same as its return-of-principal mortgages and start at 1.24%.
In terms of repayment, this will be limited to the sale of the main residence only, with part of the interest only and part of the capital repayment mortgage also authorized under the same criteria.
Anyone claiming interest only will need a minimum income of £ 75,000 for single claims (or £ 100,000 if they are joint) and the product will have a maximum term of 25 years (or retirement age if it’s earlier).
Henry Jordan, Director of Mortgages at Nationwide, said: “Interest-only loans remain an important part of the market, especially for those who have a good level of equity in their home.
“Since we re-entered the market earlier this year, we have seen good demand from borrowers and we are pleased to be able to now extend our range of interests only to purchases as well as re-mortgages.
“As the UK’s second largest lender, it is natural that we continue to look for ways to support the mortgage market, including the products we make available through brokers and we hope to expand our range. in the near future.”
Martin Stewart, Director of London Money, added: “The good news seems to keep coming for the time being and it is a fantastic announcement from Nationwide to open their Interest Only Offer to now include Purchase Requests.
“It’s no secret that the industry has been battered over the past few months, with many lenders withdrawing or changing their criteria as we all fought to acclimatize to the impacts of the pandemic.
“So for a lender to now announce something very positive like this is great news for the brokerage community.
“Interest only will always have a place in the mortgage market and by allowing only regulated advisors to be able to recommend this product on behalf of Nationwide, it further proves not only their support for the middle industry, but also the importance of good impartial advice. for the consumer. “
Greg Cunnington, Director of Lender Relations and New Homes at Alexander Hall, said: “Nationwide’s return to interest-only loans earlier this year was a very positive move.
“Today more than ever, customers need the widest range of options available.
“Interest-only mortgages are a great option for some clients and an integral part of the discussion about holistic advice for intermediaries. So it was a great show of support for Nationwide’s middleman market.
“We have seen brilliant customer results from these products since their launch, and our advisors have indicated that processing is very easy with clear communication about the submission process and packaging required.
“The buying market remains buoyant, with strong pent-up demand from the foreclosure period and buyers wanting to take advantage of the stamp duty holiday.
“It’s good news that Nationwide is now making interest only available for purchasing apps.
“This ensures that buying customers have an even wider range of product options available. “