We now offer a residential Interest-only mortgage which gives customers a choice of how to repay their mortgage.
Interest-only mortgages are subject to a customer having a suitable repayment plan to pay off the mortgage balance at or before the end of their mortgage term.
The customer only pays interest charged on the loan. The outstanding capital balance will not reduce during the term of the mortgage.
The full mortgage balance will need to be paid by the end of the agreed term so it is important that you and your customer plan how they will repay the outstanding balance, by having a suitable repayment plan or plans.
Customers should regularly review their repayment plans to ensure they remain on track to provide sufficient funds to repay their mortgage in full at the end of the term.
If the customer’s Interest-only mortgage is accepted, we will help customers ensure that their repayment plans are on track by:
To be eligible for an Interest-only mortgage we will need:
Multiple repayment strategies are acceptable, subject to the guidance held within the acceptable repayment strategies. As part of the process the main repayment vehicle is to be input into the system, subsequent evidence (if, applicable) and declaration for all vehicles is to be provided as part of the mortgage application process.
Endowment policies (purchased in UK) Must be administered by an FCA regulated financial services firm with ‘authorised’ status
Copy of latest projection statement dated within last 12 months
Savings (UK). Must be administered by an FCA regulated financial services firm with ‘authorised’ status.
Investment plans (Professionally managed) - (including Unit trusts / Open Ended Investment Companies (UK), Investment Bonds (UK), Stocks and Shares ISA (All stocks and shares held in a Stocks and Shares ISA. The investment and return must be in Great British Pounds / UK Sterling Only) Must be administered by an FCA regulated financial services firm with ‘authorised’ status
Managed investment plans latest statement issued by the administering company within the last 12 months Investment portfolio (Unit trusts, open ended investment companies (UK), investment bonds (UK) and stock and shares ISA): value based on current cash value
Share Portfolio. Must be administered by an FCA regulated financial services firm with ‘authorised’ status.
Managed Share Portfolio Account statement or confirmation from an authorised stock broker containing evidence of shareholdings together with their current valuation (must be dated within the last 12 months)
Pension - Defined contribution scheme or Pension - Defined Benefit schemes (Final Salary)
Sale of second (UK) property (including Buy to let)
Sale of main residence
For all interest-only mortgage have the following details to be held of file:
Supporting documents can be found on our Literature page