The move follows Nationwide Building Society’s decision to re-enter the residential interest-only market for remortgages after an eight year absence
Nationwide Building Society’s interest-only mortgage range, available through a mortgage broker UK, is now accessible to those making purchase applications.
The move, designed to offer homeowners more flexibility, follows the society’s decision to re-enter the residential interest-only market for remortgages in April this year following an eight-year absence.
Interest-only lending, offered for purchase and remortgage at up to 60% loan-to-value (LTV), will require a minimum equity of £300,000 in London, £250,000 in the South East and £200,000 across the rest of the UK.
Anyone applying for the interest-only products, which start from a borrowing rate of 1.24%, will need a minimum income of £75,000 for sole applications, or £100,000 if joint.
In terms of repayment, this will be restricted to the sale of the main residence only, with part interest only and part capital repayment mortgage also allowed subject to the same criteria.
It is also worth pointing out that the product will come with a maximum term of 25 years, or retirement age if that is sooner.
Henry Jordan, director of mortgages at Nationwide, commented: Interest only lending remains an important part of the market, especially for those with 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 are pleased we can now expand our interest only range to purchases as well as remortgages, he said.
Jordan said, as the UK’s second largest lender, it is natural that we continue to look at ways we can support the mortgage market, including the products we make available through brokers and we hope to expand our range further in the near future.