Barclays has introduced a £300,000 minimum loan size to secure one of its interest-only mortgages.
Applicants will need to earn £75,000 each year to qualify or have a combined annual salary of £100,000 if they apply with a partner. The bank requires borrowers to have a minimum deposit of 25%.
Aaron Strutt, product manager at Trinity Financial, says: “More of the banks and building societies are offering interest-only mortgages and they are more readily available. Borrowers are more likely to qualify if they have a strategy to repay the mortgage or they have a large deposit or lots of equity in their property.
“Barclays new interest-only minimum loan size applies to all new residential lending. For clients borrowing on a part interest and part capital repayment basis, the minimum interest-only amount will still need to be £300,000.”
Santander making interest-only changes
Santander for Intermediaries has also announced it is amending its interest-only criteria by introducing a buffer to reflect the equity at the end of the mortgage term.
For part interest-only mortgage applications where clients are using the sale of the property with part capital and interest, the £150,000 minimum equity requirement will be calculated on the equity at the end of the mortgage term.
For pure interest-only mortgages with the sale of property being used a repayment vehicle, the £150,000 will still be based on the deposit/equity at the point of application.
Santander’s new criteria will be implemented on the 21 February.
For help to secure an interest-only mortgage, call Trinity on 020 7016 0790.