Leeds launches new two year fixed interest only deals with incentives
Two new interest only mortgages with £1,000 cashback have been launched by Leeds Building Society.
Both are two year fixed rate mortgages and each comes with a free valuation, as well as fees assisted legal services for standard remortgages.
The deals are:
- 09% interest only available up to 60% LTV (loan to value); and
- 24% interest only part and part available up to 75% LTV.
“More choice is returning to the interest only market and these new products with incentives complement our existing range,” said Jaedon Green, Leeds Building Society’s Director of Product and Distribution.
“Activity last year suggests borrowers with interest only and part and part mortgages are more likely to remortgage, compared to capital and interest borrowers[i], and we’d expect even more of these homeowners to take advantage of current low rates and switch to a better deal.
“Many interest only borrowers may have felt deserted by lenders in recent years but this sector remains a clear and successful focus for Leeds Building Society, as acknowledged by our awards for our part and part proposition[ii].
“With the incentives our latest products include, we’d expect the part and part deal to be of particular interest to interest only borrowers seeking to remortgage.
“Part and part mortgages offer more flexibility for borrowers to reduce their mortgage debt in a manageable way, such as when they have an endowment shortfall, without the payment shock of switching to a full repayment mortgage.
“We continue to refine and improve criteria on our interest only lending in response to broker and borrower feedback[iii] - last year we increased our interest only LTV maximum to 60%, whether alone or in part and part lending, where we’ll lend up to 75% LTV overall.
[i] CML regulated mortgage data showed 63% of all interest only lending in the first three quarters of 2016 was for remortgage, compared to 51% of capital and interest lending during the same period.
[ii] Leeds Building Society’s part and part proposition won the “Innovation in Personal Finance” category at the 2016 Moneyfacts Awards and the “Product Innovation (Lenders)” category in the Mortgage Finance Gazette Awards 2016.
[iii] Leeds Building Society is unique among interest only lenders in not imposing minimum income requirements and calculates the minimum equity based on the borrower’s term end position.
As a responsible lender, the Society assesses affordability for all borrowers on the basis of a full capital repayment mortgage.