Barclays changes policy to offer greater flexibility on its interest-only mortgages
Quick Summary
Barclays has increased the maximum loan-to-value where the repayment vehicle is the sale of property to 75% for interest-only applications where there is at least £500,000 in equity in a property. The maximum loan-to-value allowed on an interest-only basis is 75%, meaning borrowers need a 25% deposit.
Barclays has increased the maximum loan-to-value when the repayment vehicle is the sale of property to 75% for interest-only mortgage applications where there is at least £500,000 in equity in a property.
The maximum loan-to-value allowed with Barclays on an interest-only basis is 75% meaning borrowers will need a 25% deposit.
Where the repayment strategy is the sale of mortgaged property and LTV ≤50%, customers are required to have a minimum equity of:
- £300,000 for properties in Greater London
- £250,000 for properties in South East and East Anglia
- £200,000 for properties in all other regions
Where the repayment strategy is the sale of mortgaged property and LTV >50%, customers must have a minimum equity of £500,000 across all regions, and a maximum age of 70 at maturity will apply. There is a table further with postcodes for each region and equity requirement.
What is the maximum term for Barclays interest-only policy?
The maximum term for an interest-only mortgage is 25 years and it must not extend into retirement. Additionally, affordability must be demonstrated no later than age 70.
What is the maximum income multiple and salary requirement for the Barclays interest-only policy?
The maximum income multiple applicable to interest-only mortgages is typically 5.00x single or joint incomes.
There is a minimum income criteria required to be eligible for interest-only borrowing (including part and part borrowing):
- Sole application – the applicant must have a gross income of at least £75,000
- Joint application – one applicant must have a gross income of at least £75,000
- Joint application – where no individual income is over £75,000, the joint gross income must be at least £100,000
Income must meet lending standards requirements with regards allowable gross income types i.e. Basic + sustainable allowances + self-employed income.
Aaron Strutt, product director at Trinity Financial, says: "Barclays has eased its interest-only policy to try and match some of its competitors. There is a lot of competition in the market to attract borrowers keen to lower their monthly repayments and take an interest-only mortgage.
"For residential mortgages, a maximum loan-to-value of 75% applies to the interest-only part of the loan, and you could borrow up to 85% loan-to-value on a part interest and part capital repayment basis."
Call Trinity Financial on 020 7016 0790 to secure an interest-only mortgage, book a consultation, or complete our mortgage questionnaire.
The information contained within was correct at the time of publication but is subject to change.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
Get started today
Speak to one of our mortgage experts. Book an appointment to come and see us or request one of our experts to call you.
