Barclays changes interest-only mortgage minimum equity requirements
Barclays for Intermediaries has changed its interest-only mortgage criteria to make qualifying easier. The bank has aligned its interest-only policy with some of its competitors, like Nationwide for Intermediaries, to try and get more mortgages agreed.
Barclays customers will require a different level of minimum equity when they sell a property and use it as an interest-only mortgage repayment strategy.
After the interest-only element of the lending, borrowers previously needed at least £300,000 of equity in their property. However, this has changed to a tiered approach dependent on the location of the security property.
Barclays new minimum equity requirements:
- London - £300,000
- South East and East Anglia - £250,000
- Rest of the UK - £200,000
How much do you need to earn to qualify for interest-only with Barclays?
Barclays minimum income requirement to access interest-only is £75,000 gross per annum for a single applicant or £100,000 for a joint application where no individual earns more than £75,000.
The maximum loan-to-value is 75% of the property value where the mortgage has an interest-only element. Customers may be able to borrow up to 85% loan-to-value with a Part and Part repayment option. However, the interest-only element would be a maximum of 75% (50% if the repayment strategy is the sale of the mortgaged property).
Trinity FInancial's brokers constantly help borrowers secure interest-only mortgages. Call us for expert mortgage advice.
Nationwide for Intermediaries has a similar interest-only policy to Barclays
Nationwide will also calculate the minimum amount of equity in a property by region to determine whether it will issue interest-only mortgages.
The minimum property equity levels:
- £300,000 for Greater London/Outer Metropolitan
- £250,000 for Outer South East
- £200,000 for all other UK regions
Nationwide's minimum income criteria is £75,000 for sole applicants and £100,000 for joint applicants. Borrowers must make a 40% deposit to qualify and the maximum term is 25 years (or retirement if sooner).
First-time buyers are not eligible for interest-only purchase applications. The maximum mortgage loan size on interest only is £5 million.
Which banks and building societies offer interest-only mortgages?
Most mortgage lenders offer interest-only now, so there is a lot of choice in the market.
Banks and building societies have different interest-only qualification rules, so if you do not qualify with a big lender like Barclays or Nationwide, it may be possible to get interest-only through a smaller lender like Family Building Society or Hinckley and Rugby.
Call Trinity Financial on 020 7016 0790 to secure an interest-only mortgage or book a consultation
The information contained within was correct at the time of publication but is subject to change
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