Tightening of Coventry interest-only mortgage criteria.
More interest-only mortgage changes have been announced.
The Coventry BS is changing its interest-only mortgage criteria for a second time.
Earlier in the year the building society announced the withdrawal of interest-only lending to first time buyers. This change followed in line with other UK lenders who tightened their lending criteria in response to MMR proposals in December 2011.
Coventry also announced that the maximum it was prepared to lend on an interest-only mortgage basis was 75% loan to value, advising any amount borrowed above this level must be on a repayment mortgage basis.
Accepted repayment vehicles have now also been changed.
The most recent interest-only criteria change by the Coventry has restricted what it will accept as an adequate repayment vehicle. The majority of ISA products are now excluded.
Under its new criteria, saving and cash ISAs and premium bonds are no longer considered as an acceptable form of repayment plan. However stocks and share ISAs remain acceptable as does the sale of unencumbered property.
Since December's Mortgage Market Review, all interest-only repayment plans have to be in place for a year before an interest-only mortgage application will be considered.
If you are looking for an interest-only offer Deal Direct can find you the right mortgage to suit your financial needs.
Contact a Deal Direct adviser for a free quote.
