Yorkshire Building Society Enters Interest Only Mortgage Market
Yorkshire Building Society has announced that it will be offering interest only mortgage options to borrowers up to 75% loan to value (LTV). This option is subject to borrowers being able to affordability with the requirement that the mortgage can also be repaid on a repayment basis (capital and interest).
Yorkshire Building Society senior mortgage manager Charles Mungroo says: “Demand for interest-only mortgages is increasing and for borrowers who have made an informed decision that this repayment method best meets their needs, and who have a clear strategy to repay the loan, we understand the additional flexibility interest-only can provide.
“As a responsible lender we have designed the interest-only repayment option in a way that reflects the needs of borrowers, while meeting those needs in a financially sustainable way. We’re confident the introduction of interest-only options will be welcomed by a number of customers in this market and are pleased to offer borrowers more choice.”
The new interest only option is also available for offset mortgages.
YBS require that borrowers can demonstrate they have an acceptable repayment strategy in place for the mortgage.
Sale of property is an acceptable strategy as long as the amount borrowed does not exceed 50% of the loan to value and where there is at least £200,000 of equity in the home.
Moneyfacts reported earlier this month that there has been a significant increase in interest only mortgage deals becoming available for UK borrowers, with products having doubled in the last 5 years.