Has time run out for the cheapest remortgage deals?
The cheapest remortgage deals are interest-only products but for many home owners these mortgages may no longer be available.
Many lenders have dramatically reduced their loan-to-value limit for interest-only mortgages to 50% from previous levels of around 75%. This means that a 50% deposit is required, which puts this type of product out of the reach of many borrowers.
If you have an existing interest-only mortgage at a higher loan to value, you could also have problems if you want to borrow additional money for home improvements because this could be considered a new loan. You may find that you are only permitted to borrow a total of 50% of your property value, which could be less than the original mortgage.
In addition many lenders who still offer interest-only mortgages have tightened their lending criteria so the cheapest remortgage deals are likely to be fairly limited.
Santander was the first to reduce its loan to value limit for interest-only mortgages to 50% followed by Nationwide, Coventry and Leeds Building Society. Lloyds Group, which includes Halifax, Cheltenham and Gloucester, Lloyds TSB has also announced stricter lending criteria.
Whilst HSBC has not cut its loan to value limit so sharply you will need a minimum £30,000 salary to qualify for its interest only loans.
If you are looking for the cheapest remortgage options call Deal Direct. Interest only is not the only option and we can source many other deals from the wide mortgage market to suit your needs.
