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Abbey relaxes interest-only and BTL lending policy

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  • 20/11/2012
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Abbey relaxes interest-only and BTL lending policy
Abbey for Intermediaries is to open up its interest-only mortgage policy by offering part interest-only and part repayment loans up to 75% LTV, available from tomorrow.

The lender will accept applications up to 75% LTV from new borrowers, with up to 50% of the loan allowed to be on an interest-only basis. The remainder must be taken on a repayment basis.

The lender said that the move would provide “greater flexibility” for brokers and their clients.

Abbey added that where sale of an applicants’ main residence is the chosen repayment vehicle for a interest-only or part and part mortgage it will still require a minimum equity buffer at application of £100,000.

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.”

The lender’s interest-only mortgages continue to be available up to 50% LTV only.

Abbey is also reducing the minimum property value required for buy-to-let mortgages from £100,000 to £75,000, it says this decision follows feedback from brokers.

Sard added: “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.”

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