Interest only mortgage criteria may now be relaxed.
There has been a lot of change in the interest only mortgage market this year. Lenders began to tightened their criteria earlier in the year in response to last December's mortgage market review.
Minimum deposit levels for residential lending were increased by many lenders to 50%, and some went a step further and withdrew from the market altogether.
Recently criteria has started to loosen, and some lenders are now prepared to lend with less than 50% as a deposit.
Santander are one lender to adjust their criteria and now offer interest only mortgages from 25% LTV. The lender is also considering accepting the sale of property as a means to repay the loan.
If you are presently stuck on your lender's SVR now might be the time to consider a remortgage while rates are low and criteria is relaxing. With an interest only deal you can reduce your monthly costs, however it is vital to have a repayment plan to ensure the capital owed can be paid off at the end of the term.
Interest-only lending is not right for all home-owners, however there is still a place in the market for this type of product.
Lenders are reviewing interest-only policy following the release of new FSA guidelines, which emphasis mortgage affordability.
With less than 50% deposit an interest-only mortgage may be available to you, however you may have to accept part as interest-only and the other part as a repayment mortgage.
For a mortgage comparison of all lenders best offers call Deal Direct.
