Skipton BS tightens criteria on interest only mortgages

In keeping with the trend of the last 12 months or so, yet another lender has tightened its criteria for those wishing to get Interest Only mortgages. This time it's the Skipton Building Society and they have introduced a minimum income requirement of £40,000 pa for all applicants. The change takes effect today and applies to the gross income of the main earner on the application. 100% of main and regular bonus income is eligible in this calculation but only 50% of overtime and irregular bonus payments. Also, the maximum LTV available on Interest only mortgages is now 60% though you can get up to 80% on a part Interest Only part repayment structure with the amount of the loan over 60% being on a repayment basis. This move is rather typical of the way that lenders are withdrawing from the interest only market, particularly now as many people who originally took these mortgages are seeing their loans come to the end of their term without an appropriate repayment vehicle in place sufficient to make the repayment. This whole trend is another example of the finance industry shutting stable door long after the horse has bolted and we can't help but feel the problems with Interest Only mortgages have only just begun to surface and will be around for some time yet. In genreral interest Only mortgages are available but they are now the preserve of the well-to-do who can afford to take loans of low LTV and have sufficient income to meet affordability requirements such as these with the Skipton Building Society. At Choice Loans we work with regulated mortgage brokers who can advise you on your options. If you would like to speak to someone about what is available to you please either call 0845 1260350 or complete our mortgage enquiry form here and we will call you.