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HSBC tightens LTV criteria on flats and interest-only exit plans

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  • 13/08/2020
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HSBC tightens LTV criteria on flats and interest-only exit plans
HSBC has reduced its maximum loan to value (LTV) for flats from 90 per cent to 85 per cent LTV while making changes to interest-only criteria.

 

In an email to brokers, the bank said the new lending limit for flats would be cut to 85 per cent and new build flats would be reduced from 85 per cent to 80 per cent LTV.

HSBC borrowers looking for additional borrowing are now restricted to 85 per cent LTV.

Homeowners who want to take their mortgage on an interest-only basis, and are using an investment or a stocks and share ISA as the repayment vehicle, now have to provide their latest investment statement which must be dated within 35 days.

HSBC will allow the homeowner’s interest-only mortgage to be a maximum of 50 per cent of the investment value.

To use the sale of another property as the exit strategy, borrowers must be able to provide the latest mortgage statement dated within the last 35 days.

The changes take effect from Monday 17 August.

 

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