Leeds increases LTV on interest-only mortgages

12th September 2016

Leeds Building Society has increased the loan-to-value (LTV) on all of its interest-only mortgages from 50% to 60%.

The change applies across the society’s interest-only range, including its part-and-part mortgages. Part-and-part deals are available up to 75% LTV, and the society will now lend up to 60% LTV on interest-only and the remainder on a capital and repayment basis.

Leeds Building Society has also refined its minimum equity requirements for borrowers intending to use sale of the property as a repayment strategy, taking regional variations in property values into account to give greater flexibility and a more tailored service. Unlike many interest-only lenders, the mutual accepts sale of property as a repayment strategy and does not impose minimum income requirements.

“We believe our interest-only proposition is unique in the market for the combination of lending criteria,” said Richard Fearon, Leeds Building Society’s chief commercial officer.

“The changes we’ve made are intended to help more borrowers who are not well-served by the wider market as we respond to borrowers’ and intermediaries’ feedback innovatively and responsibly.

“Refining and improving our interest-only lending criteria is a way we can do this, to achieve our purpose to help more people to have the home they want.

“Our interest-only deals come with a range of fee and incentive options. We know the fees-assisted part-and-part products have been particularly popular with homeowners looking to remortgage from existing interest-only loans.

“Part-and-part can offer borrowers more flexibility in reducing their mortgage debt in a manageable way, when they have an endowment shortfall, for example. It also can suit borrowers whose salary is expected to rise, such as through professional qualification.”

*2 year fixed with TSB 1.09% then 3.59% - APRC is 3.3% Max LTV is 60%. Quoted on 27th May 2020.