The range is intended to support borrowers who are changing their repayment type due to the market’s continuing affordability challenges, alongside serving its core later life borrowers.
The changes will see interest-only residential products reduced by up to 16 basis points (bps).
Suffolk Building Society is also introducing a discount mortgage at 90% loan to value (LTV). This is aimed at helping people with smaller deposits – such as first-time buyers – “take advantage of the prospect of future BoE base rate drops”.
The mutual’s 90% residential mortgage is a two-year deal that is available for purchase or remortgage from today, with a maximum loan amount of £650,000 and a discount rate of 4.95%.
The rate reductions on interest-only products that are available from today are as follows:
• 80% LTV residential two-year discount interest-only reduced by 15bps to 4.85% (from 5%) for 24 months
• 80% LTV residential two-year fixed interest-only reduced by 16bps to 4.99% (from 5.15%) until 31 August 2027
• 80% LTV residential five-year fixed interest-only reduced by 16bps to 5.09% (from 5.25%) for 60 months
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Charlotte Grimshaw, head of intermediaries at Suffolk Building Society, said: “There’s a strong focus on supporting first-time buyers at the moment – and so there should be; they underpin our housing market. However, interest-only borrowers, who often fall into the ‘later life’ group, have long been under-served – facing age restrictions and limited options.
“With our changes to repayment vehicles, we decided to close the rate differential between our capital and interest and our interest-only products – giving people more choice. This helps borrowers who are looking to borrow into retirement, people currently on interest-only terms, or those looking to migrate over to interest-only.
“These rate reductions come on the back of the significant criteria change we made on Monday, increasing the maximum LTV from 50% to 70% when downsizing.”
