Leeds launches interest-only options
Martin Richardson, business development manager at Leeds, said: “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.
“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.”
The deals are not restricted based on minimum income requirements while Richardson said they may appeal to high net worth borrowers who are looking to use an interest-only mortgage as part of a wider investment strategy.
Jeremy Duncombe, director of Legal & General Mortgage Club, said: “Many customers have been affected by changes to interest-only criteria post-Mortgage Market Review, and it’s great to see Leeds continue its 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.”