The two exclusive products, offered at 60% and 75% loan-to-value (LTV), run over a five-year term to 31 December 2021.
They can also be taken as interest-only part and part which allows clients to split their mortgage between both interest-only and full repayment. For 60% LTV this could mean the client opting for 35% interest-only/25% repayment, while at up to 75% LTV the combination of interest-only and repayment is the client’s choice but the interest-only element cannot exceed 60% LTV.
John Coffield, head of Paradigm Mortgage Services, said the development of interest-only, and in particular, the part and part option, shows Leeds is at “the forefront of innovation in the mortgage sector”.
It comes only weeks after Leeds increased maximum LTV on all interest-only mortgages from 50% to 60%.
The two five-year products are offered at 2.25% for 60% LTV, and 2.45% at 75% LTV. Each comes with a free standard valuation, fees-assisted legals for standard remortgage and an arrangement fee of £1,499. The maximum loan available is £1.25m up to 65% LTV and £1m up to 75% LTV.
All interest-only applicants must have a credible repayment strategy in place to repay the capital at the end of the mortgage term – this can include the use of equity after sale of the mortgaged property.
“We are very pleased to be the first, and only, distributor to be offering these exclusive five-year fixed rate products to market through Paradigm’s member firms,” said Coffield. “Undoubtedly, existing interest-only borrowers and those with endowment shortfalls will be interested in products which give them both payment security over the long-term but also allow them to pay off some of their mortgage capital.”
Jaedon Green, director of product and distribution at Leeds Building Society, said the lender is continuing to refine its interest-only proposition, a segment of the market that has been declining.
“The criteria improvements we’ve made, such as changing minimum equity requirements to take account of regional variations in property prices, offer greater flexibility and a more tailored service. We’ve made these changes to help more borrowers who are not well-served by the wider market as we respond to borrowers’ and intermediaries’ feedback innovatively and responsibly,” he said.