The Skipton Building Society has launched a new interest-only mortgage range and made cuts to core residential mortgage rates.
Its new residential interest-only range provides 60%, 70% and 80% LTV products available to purchase and remortgage customers.
The purchase range, which offers free valuations, includes a fee free two-year fix at 1.66% to 60% LTV, 1.33% to 60% LTV with £1,495 completion fee and 1.79% to 80% LTV with £1,495 completion fee. Five year fixes include a fee free 2.25% to 60% LTV and 2.29% to 80% LTV with £1,495 completion fee.
The interest only remortgage range, which offers free valuations and standard legals, includes a fee free two-year fix at 1.79% to 60% LTV and 1.46% to 70% LTV with £1,495 completion fee. The five-year fixed range includes a fee free 2.24% to 60% and 2.21% to 80% LTV with £1,495 completion fee.
The mutual has also enhanced its policy for interest only residential lending. Changes are as follows:
- The maximum loan for interest only of £500,000 has now been removed, with standard maximum loan limits now being applied. The Society will now also accept the following repayment strategies:
- Sale of Mortgaged Property: The main residence can be used as the repayment vehicle when a minimum of £400,000 of equity exists within the property, providing the Sale of Property element is no greater than 50% LTV. If the overall interest only loan is above 50% LTV, additional repayment vehicles can be used in conjunction with Sale of Mortgaged Property up to 70% LTV interest only, 80% part and part.
- Pension: Up to a maximum of 15% of the customers total projected pension pot is permitted, where the minimum projected value of the pension pot is £400,000.
- A combination of repayment vehicles can be used subject to criteria.
The enhanced policy for interest-only residential lending is also available for those who want Skipton Bespoke, a proposition which the society launched recently for customers looking to borrow mortgages of over £1m. The bespoke service allows brokers to help clients who have unique requirements for larger mortgages, allowing them to mix and match key product elements, such as the term, fee and product incentive, to create unique mortgages.
Paul Darwin, Skipton’s director of intermediary relationships, said: “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.”