Nationwide Building Society is offering interest-only mortgages for the first time since 2012.
For the moment Nationwide has limited its interest-only lending to remortgages and borrowers have to meet some strict acceptance criteria.
Applicants will need to have at least 40% equity in their property to qualify for interest-only and the amount they need will depend on the property's location. Properties will need £300,000 equity if they are in Greater London, £250,000 for Outer South East and £200,000 for all other UK regions.
As well as having a minimum amount of equity in your property, sole applicants will need to have a minimum basic income of £75,000 and £100,000 for joint applicants to qualify for interest-only. Nationwide will not take secondary incomes, bonuses, overtime or commission into its affordability calculations for interest-only applications.
Aaron Strutt, product director at Trinity Financial, says: "Nationwide is one of the last large lenders to start offering interest-only mortgages again and its acceptance policy is tougher than some of its main competitors. The lender pulled out during the last financial crisis and has been threatening to re-enter the market for years. Approximately 47 lenders provide interest-only mortgages."
Call Trinity Financial on 020 7016 0790 to secure an interest-only mortgage
The maximum loan size for Nationwide's interest-only remortgages is £2 million.
There is a maximum term of 25 years rather than the 40 year maximum for those taking full capital repayment, and the sale of the property can be used as a repayment strategy.
Nationwide has limited the availability of its interest-only mortgages and they need to be taken via a mortgage broker.
Trinity Financial's brokers have been working with Nationwide for Intermediaries its intermediary lending department. We can get a mortgage agreed quickly and efficiently.
Applicants will also need to sign a ‘sale of residence customer declaration form’ to ensure they understand the requirement to sell their property to repay the outstanding balance at term expiry.
Nationwide for Intermediaries does not charge a higher rate for its interest-only mortgages.
The lender provides some of the cheapest fixed rates in the market and has a selection of two, three and five and ten-year rates.