The lender, which is part of Yorkshire Building Society, did not offer a residential interest-only option until today, and is also extending it to its offset mortgages.
To meet the new criteria, Accord requires borrowers to demonstrate they have an acceptable repayment strategy in place at the end of the mortgage term, which could include existing endowments or savings and investments.
Product details include:
- Maximum 75% loan to value with a qualifying repayment vehicle
- Sale and downsize maximum of 50% interest-only with up to 25% repayment (minimum of £200,000 equity on application)
- No minimum income
- No income restrictions with affordability up to five times household income
- Senior underwriters allocated to interest-only applications
Sensible lending
Coreco director Andrew Montlake said: “This is another good move from Accord who have been a strong lending partner for brokers in general this year.
“There has always been a place for sensible interest-only lending and this change will help to give borrowers more choice.”
Accord Mortgages managing director Charles Canning (pictured) said: “Demand for interest-only mortgages is increasing and for borrowers who have made an informed decision that this repayment method best meets their needs, and who have a clear strategy to repay the loan, we understand the additional flexibility it can provide.
“As a responsible lender we have designed a lending policy that reflects the needs of borrowers and meets those needs in a financially sustainable way. We’re confident the introduction of interest-only options will be welcomed by brokers and borrowers looking for choice in the market.
“To help brokers place interest-only cases with us and ensure efficient turnaround times for clients we have dedicated interest-only underwriters ready to answer any questions,” he added.
Legal & General Mortgage Club director Jeremy Duncombe added: “Interest-only is an important option for the right customers who have received appropriate advice from a mortgage broker.
“Our recent Value of a Broker research demonstrates the importance of speaking to an intermediary, and it’s great that Accord place similar value on their role. By introducing interest-only, Accord continues to develop their range and offer more choice for the intermediary market.”
