Santander removes minimum income interest-only mortgage requirement
Santander for Intermediaries has removed its minimum income requirement for borrowers looking for interest-only mortgages.
Previously there was a £50,000 requirement for single clients or £70,000 for joint applicants.
Where any loan part is on interest only, Santander’s standard income multiples of up to five times income will apply, unless the combined gross income is less than £100,000, in which case it will lend up to 4.45 times income.
As part of the change, the bank has also raised its maximum age so the mortgage term can go up to the oldest applicant's 70th birthday. This has been increased from 65.
Sale of the property as repayment vehicle
When the sale of the property is being used as the mortgage repayment vehicle, borrowers will need a minimum of £150,000 equity in their property.
For part interest and part capital repayment, the £150,000 is calculated on the equity at the end of the mortgage term.
Trinity’s comment
Aaron Strutt, product director at Trinity Financial, says: “Santander is one of few lenders offering interest-only with no minimum income to clients up to the age of 70.
“More of the lenders are providing interest-only, although they tend to have bigger income requirements. For example, NatWest and HSBC expect applicants to earn at least £100,000.
“A recent article in The Times highlighted that only 1% of new borrowers buying a home managed to secure interest-only, this increased to 4% for those who remortgaged. At the moment, borrowers taking product transfers are not including in these figures.”
For help to secure an interest-only mortgage, call Trinity Financial on 020 7016 0790.
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