The LTV for part and part loans has been increased to 85%.
Following broker feedback, the lender has also added further flexibility for repayment options. Multiple repayment strategies can now be used to support the repayment of the mortgage.
Borrowers whose exit route is to downsize and sell their existing mortgaged property remain capped at 60% LTV, in line with the mutual’s existing policy.
Ben Smith, head of commercial and product development at Newcastle Building Society, said: “We know that brokers and their clients value choice and simplicity, so by extending our interest-only LTV to 80% and accommodating multiple repayment vehicles as standard, we’re making it easier for brokers to find the right solution for those looking to move home and remortgage.”
Reviving interest-only mortgages to make homeownership more affordable was among the topics debated by industry professionals at a roundtable earlier this summer, ahead of the Financial Conduct Authority’s (FCA’s) release of its simplification rules.
Aldermore Insights with Jon Cooper: Edition 10 – The biggest barrier to homeownership isn’t affordability. It’s outdated lending.
Sponsored by Aldermore
In its discussion paper on mortgage market rules, the regulator went on to say that it could look at revising its expectation that firms ensure the sale of a property will leave borrowers with enough money to not just repay the mortgage but also to buy a cheaper property.
It added: “This could mean the sale of the property would qualify as a credible repayment strategy if it was highly likely to repay the total mortgage amount without having to consider any sums left over or future housing need.”
