Accord Mortgages has moved in to the interest only market with the launch of interest only repayment options for its residential mortgage range.
The intermediary arm of Yorkshire Building Society is offering interest only options to new borrowers seeking up to 75% loan-to-value (LTV).
Charles Canning, managing director of Accord Mortgages, said: “We’re pleased to add interest only repayment methods to our Accord mortgage range.
“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 it can provide.
“As a responsible lender we have designed a lending policy that reflects the needs of borrowers and meets those needs in a financially sustainable way. We’re confident the introduction of interest only options will be welcomed by brokers and borrowers looking for choice in the market.
“To help brokers place interest only cases with us and ensure efficient turnaround times for clients we have dedicated interest only underwriters ready to answer any questions.”
To meet the newly introduced lending criteria, Accord requires borrowers to demonstrate they have an acceptable repayment strategy in place at the end of the mortgage term, which could include existing endowments or savings and investments.
The lender will allow the sale of the mortgaged property at the term end to be used as a repayment strategy, where the amount borrowed against this strategy does not exceed 50% LTV and where there is a minimum of £200,000 equity within the property.
Accord is also offering the interest only repayment options on its offset mortgages, which provide borrowers with additionally flexibility when managing their home loan.
Jeremy Duncombe, director of Legal & General Mortgage Club, said: “Interest only is an important option for the right customers who have received appropriate advice from a mortgage broker.
“Our recent “Value of a Broker” research demonstrates the importance of speaking to an intermediary, and it’s great that Accord place similar value on their role. By introducing interest only, Accord continues to develop their range and offer more choice for the intermediary market.”