Principality restricts interest-only

by Aaron Strutt

Apr 13 2012

Principality Building Society is the latest lender to make changes to their interest-only policy.

Borrowers planning to take one of the Principality's interest-only mortgages will have a limited selection of rates to choose from, as they look to limit exposure to this type of lending.

The vast majority of their mortgages will be available on a full capital-repayment basis.

Aaron Strutt, a broker at Trinity Financial, says: “We still have access to a number of lenders offering interest-only, but the choice is now drastically reduced unless you have a substantial deposit.

“Northern Rock has a competitive two-year fix at 3.59% and a low three-year fix is 3.89%. Both mortgages are available on interest only if you have a 30% deposit and they have £995 arrangement fees. The maximum loan size is £1 million.”

April 13, 2012