Back to May 2015

Leeds Building Society flexes interest only criteria

Changes to interest only lending criteria by Leeds Building Society will give borrowers more flexibility in how they can buy a property or start to pay down their existing interest only mortgage.

New part and part interest only mortgages launched on Tuesday, 19th May, will be available up to 75% LTV, with a maximum of 50% on an interest only basis and the remainder on a capital and repayment basis.

“We’re offering borrowers who are currently on full interest only an opportunity to remortgage and benefit from the flexibility of starting to pay down their loan in a manageable way,” said Martin Richardson, Leeds Building Society’s General Manager – Business Development.

“There will be many borrowers who took out interest only loans at the peak of their popularity in the mid-2000s, some of whom may have an endowment shortfall or have yet to reduce the original amount of their loan.

“Our part and part deals provide borrowers with the ability to start reducing the capital they owe, without the payment shock of moving to a full repayment mortgage.

“As a responsible lender, we assess affordability for all borrowers on the basis of a full capital repayment mortgage.

“This proposition will be attractive to a wide range of customers and is not restricted based on minimum income requirements.

“Part and part may also appeal to high net worth borrowers who are looking to use an interest only mortgage as part of a wider investment strategy.”

The Society’s new part and part interest only mortgages are:

 

  • Two year fixed rate interest only mortgage at 2.39%
  • Five year fixed rate interest only mortgage at 2.99%
  • Two year discounted rate interest only mortgage at 2.35%

 

All come with a free valuation, fees assisted legal services and a £999 fee.

Jeremy Duncombe, Director, L&G Mortgage Club said: “Many customers have been affected by changes to interest only criteria post-MMR, and it’s great to see Leeds Building Society continue their programme of innovation by making these changes.

“Giving the flexibility of selecting part and part will allow borrowers to benefit from lower rates than they may be trapped on, therefore driving more remortgage business and effectively giving borrowers a pay rise.”

Ends

Notes to Editors

The Society previously offered interest only mortgages up to 50% LTV (loan to value).

Interest only Part and Part 2 Year Fixed Rate mortgage at 2.39% up to and including 31st July 2017:

  • 2.39% available up to 75% LTV
  • Interest only element up to 50% LTV
  • £999 Arrangement Fee
  • No Completion Fee
  • Free standard valuation on properties worth up to £500,000
  • Fees assisted legal services for standard remortgages
  • 10% capital repayments are allowed each year

Interest only Part and Part 5 Year Fixed Rate mortgage at 2.99% up to and including 31st July 2017:

  • 2.99% available up to 75% LTV
  • Interest only element up to 50% LTV
  • £999 Arrangement Fee
  • No Completion Fee
  • Free standard valuation on properties worth up to £500,000
  • Fees assisted legal services for standard remortgages
  • 10% capital repayments are allowed each year

Interest only Part and Part 2 Year Discount Rate mortgage at 2.35% up to and including 31st July 2017:

  • 2.35% available up to 75% LTV
  • Interest only element up to 50% LTV
  • £999 Arrangement Fee
  • No Completion Fee
  • Free standard valuation on properties worth up to £500,000
  • Fees assisted legal services for standard remortgages
  • 10% capital repayments are allowed each year
 Part & PartFull Repayment 
Term 25 Years 25 Years
House Price £300,000 £300,000
Total Mortgage £225,000 £225,000
LTV 75% 75%
Amount of Mortgage on Interest Only £150,000 £0
Amount of Mortgage on Repayment £75,000 £225,000
Monthly Repayment £630.84 £996.27

Awards won by Leeds Building Society in the past 12 months include being named ‘Innovator of the Year’ at the Moneywise Magazine Mortgage Awards 2014 for our Welcome Mortgage. This allows borrowers to pay 0% interest for the first few months of their term to free up cash to help them settle into their new home.

The Society scooped the ‘Innovation Award (Lenders)’ at the Mortgage Finance Gazette Awards 2015, in addition to being named ‘Best Intermediary Lender’, both for the second consecutive year, and also received the award for ‘Best Use of Technology (Lenders)’.

Leeds Building Society has 67 branches throughout the UK, Gibraltar and Ireland and assets of £12.1bn (as at 31st December 2014). The Society has operated from the centre of Leeds since 1886.