TSB eases interest-only mortgage policy to make it more 'flexible'

by Aaron Strutt

Dec 01 2023

TSB for Intermediaries has easied its interest-only mortgage acceptance criteria.

The lender said that from 7 December, borrowers could use the 'sale of the property' as an interest-only repayment vehicle, providing they have a 40 per cent deposit or 40 per cent equity in their home. 

With a further 15 per cent deposit, borrowers could also have part of the mortgage on interest only and part on capital repayment.

Interest-only repayment vehicles

TSB states properties should have a minimum equity of £300,000, and the maximum term is capped at 30 years. The maximum age of the homeowner at the end of the mortgage term is 70 years, and there is no lending into retirement.

There is a minimum income requirement for interest-only with TSB of £75,000 for a sole applicant or £100,000 for joint borrowers.

First-time buyers and those buying second homes can have interest-only, providing they meet TSB's criteria. Still, those buying studio flats, using affordable housing schemes or applying for debt consolidation cannot have interest-only.

Interest-only, particularly with the sale of the property as a repayment vehicle, is an appealing option to many borrowers, especially at a time when mortgage rates are higher.

How many mortgage lenders offer interest only?

So many big banks and building societies offer interest-only now, and there is much more choice in the mortgage market.

Aaron Strutt, product director at Trinity Financial, says: "The larger lenders generally have minimum equity and higher minimum income requirements as they try to attract higher earners. However, not all lenders require borrowers to be higher earners.

"For many part-and-part is the more sensible option as at least some of the debt is being repaid."

Call Trinity Financial on 020 7016 0790 to secure a large mortgage loan, 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