Negative press coverage of interest only mortgage products after the financial crash has led to a great deal of confusion about their availability on the modern mortgage market.
In my experience, this means clients do not have a thorough understanding of the availability of the interest only mortgage products. Likewise, many clients are not aware of the criteria required to qualify for such a mortgage.
However, providing you have a suitable repayment strategy in place, an interest only mortgage is a viable route—particularly for clients with a strong financial profile. If you have irregular income or outgoings, an interest only loan will allow you to minimise your monthly mortgage repayments. It could also be a route worth exploring if you’re looking to have more disposable income for lifestyle spending.
We are currently working with a lender offering an excellent interest only mortgage product. This lender currently has a 2-year tracker product, offered at 0.79% over the base rate (1.04%) for mortgages at a loan to value (LTV) of 60%.
This lender requires applicants to have a minimum income of £75,000, with at least £300,000 of equity in the mortgage property. Differing LTVs are also available dependent on the repayment strategy in place. If the repayment strategy is the sale of the mortgaged property, this lender will offer finance up to 50% LTV.
However, if you are planning to use of a portfolio of investments to cover the mortgage debt, this lender can offer up to 75% LTV on an interest only basis.
- 2-year tracker
- +0.79% over base rate
The exact interest rate offered to you will vary depending on your circumstance and the LTV you require. If you would like to know more, please contact me and I would be delighted to talk you through your options. If you’d like to consider other interest only options, check out my article on what other interest only mortgages are available for large loans.