Halifax is lowering the qualifying income needed for the sale of mortgage property (SOMP), bonus and cash repayment plans so the option is “available to more customers”.
The changes come into force from today.
SOMP is one of the acceptable methods of repayment for interest-only mortgages, so the customer is borrowing against the existing equity in the home.
For SOMP, including second homes, bonus and cash repayment plans the minimum income has reduced to £75,000 for a sole applicant, or one applicant on a joint application.
The minimum income for combined income on a joint application is now £100,000.
The maximum loan to value (TLV) available on interest-only with SOMP is rising from 50 per cent LTV to 75 per cent LTV.
For part interest-only and part repayment ending the minimum equity will be calculated at the end of the mortgage term, not at the point of application.
The limits for minimum equity at the end of mortgage are £300,000 up to 50 per cent LTV, £500,000 between 50 and 60 per cent LTV and £750,000 between 60 and 75 per cent LTV.
As an example, for a property value of £500,000, a loan of £375,000 at 75 per cent LTV would be available with up to £200,000 on SOMP to leave £300,000 minimum equity at end of term.
Brokers will receive a message where SOMP has been selected but the minimum equity requirement is not met.
All other SOMP criteria remains unchanged.
Anna is currently the deputy editor for Mortgage Solutions and editor for Specialist Lending Solutions. She has worked as a journalist since 2019, having secured her Gold Standard NCTJ diploma from News Associates in a fast-track six-month course.
She started her career as a report at specialist publication The Insurance Insider covering a wide range of areas before joining Mortgage Solutions and Specialist Lending Solutions in 2021.
In her role, she helps put together and structure the news agenda for the day and writes up press releases, reports, interviews, analyses and exclusives across both titles. She also commissions blogs for Specialist Lending Solutions and hosts online masterclasses and in-person events across the business.
She has been shortlisted for three journalism awards, which include BIBA Journalist and Media Awards Scoop of Year Award in 2020, Headline Money Mortgage Journalist of the Year Award (B2B) in 2022 and 2023.
Prior to being a journalist, Anna worked in ecommerce across Snow + Rock, Cycle Surgery and Runners Need websites, and before that worked at specialist financial PR firm Rostrum.
In her spare time, Anna enjoys reading, seeing live music, and cooking for friends and family. When she gets a chance, she also enjoys hiking, skiing and indoor rock climbing.
