AfI relaxes interest only criteria and enhances B2L
On residential interest-only applications, while the maximum LTV for interest-only borrowing will remain unchanged at 50% LTV, AfI will now consider ‘part and part’ applications up to 75% LTV. This is provided the interest-only amount is not greater than 50% LTV and the remainder of the borrowing is on a capital and interest basis.
This change is designed to provide new and existing borrowers with greater flexibility, allowing them to borrow more money on a capital and interest basis, while maintaining the maximum LTV for interest-only borrowing at 50% LTV.
For ‘part and part’ mortgages where the sale of the mortgaged property is the repayment vehicle, the minimum equity buffer at application will remain £100,000 based on the total sum borrowed. The maximum loan term for all parts where the sale of the mortgaged property is the repayment vehicle remains 25 years.
For borrowers using a qualifying investment vehicle as their repayment vehicle, there is no change to the requirement that these must have held these for at least 12 months.
AFI is also reducing the minimum property value for a buy-to-let application from £100,000 to £75,000 in response to strong demand in the non-professional buy-to-let sector, and following feedback from intermediaries and their clients. The offering remains available exclusively through intermediaries.
Miguel Sard, managing director of Abbey for Intermediaries, said: “We are committed to supporting the housing market and borrowers in today’s market conditions.
“Our maximum LTV for residential interest-only borrowing remains unchanged at 50% LTV but by now allowing ‘part and part’ applications up to 75% LTV where the remainder of the borrowing is on a capital and interest basis, we can offer new and existing interest-only borrowers greater flexibility, whether they are moving home or remortgaging to us from another lender.
”We have seen strong demand for our buy-to-let offering since its launch last December and reducing the minimum property value to £75,000 will allow more non-professional landlords to apply for a mortgage with us, particularly those outside of London and the South-East. We are committed to supporting intermediaries and their clients with great products and service and we will continue to work closely with our intermediary partners to enhance our offering.”