The firm said the maximum LTV for part capital and interest, part interest-only to 85% LTV for loans up to £1.5m.
Clydesdale Bank said up to 75% LTV can be taken on an interest-only basis and any extra borrowing up to 85% LTV is taken on a capital and interest basis.
The lender has removed the 70% LTV restriction it had for downsizing on loans above £1.5m, so downsizing can be used up to 75% LTV on an interest-only basis.
Any borrowing above 75% must be taken on a capital and interest basis.
|
Why new-build property investment is appealing to a new generation of landlords
Sponsored by BM Solutions
Clydesdale Bank has updated its affordability assessment for interest-only and part and part loans, so it uses the actual repayment type as opposed to calculating affordability as if the loan were capital and interest.
This change means that it can potentially lend more to customers.
The firm said it will no longer allow debt consolidation on interest-only, unless it was used for property improvement or repair, so debt consolidation needs to be on a capital and interest part of the loan.
Clydesdale Bank has also clarified that if it is lending on a second home, there is no minimum amount of equity required, like when a client is downsizing from their main residence.
The firm has also made some policy changes when using the sale of another property, cash savings, or investments as a repayment vehicle.
Richard Walker, head of intermediary sales at Clydesdale Bank and Virgin Money, said: “Clydesdale has built a strong reputation for its interest-only offering, and brokers consistently tell us their clients appreciate the flexibility it provides. We’re committed to evolving our support to meet customer needs, and this enhancement will give borrowers using interest-only or part and part more options to align their mortgage strategy with their broader financial goals.”
