Interest Only Criteria

The criteria below applies to residential applications only (excluding Rate Switches) where all or part of the mortgage is to be conducted on an interest only basis.

The applicant must also have an acceptable repayment vehicle.

Where the repayment vehicle is ‘sale of the security property’ please refer to Interest Only Criteria – Sale of the security property for more information as different criteria applies.

Residential Interest Only Criteria		Additional information
Maximum LTV	75%	The maximum LTV where all or part of the mortgage is to be conducted on interest only. This is based on the loan amount excluding any fees. Different limits apply where the repayment vehicle is ‘sale of the security property’.
Maximum Term	30 years	The maximum term on completion. This also applies to any part of the lending on a repayment basis. The term of the repayment lending can exceed the term of the interest only lending, taking into account the maximum term. Acceptable example: 10 year term on interest only and 30 year (maximum) term on repayment.
Maximum Age	70 years	The maximum age at the end of the term, or the applicant’s anticipated retirement age, whichever is lower. This also applies to any part of the lending on a repayment basis.
Lending into retirement	No	Not acceptable where the customer is already retired or the mortgage term will extend beyond the applicant's anticipated retirement age or their 70th birthday, whichever is lower. This also applies to any part of the lending on a repayment basis.
Minimum Income	£75k Sole and/or £100k Joint	Sole applicants - Minimum income required of £75K* Joint applicants – Minimum income required of £75K* for one applicant OR a combined minimum income of £100K for both applicants. Acceptable examples: Joint – Applicant 1 £75K and Applicant 2 £10K Joint – Applicant 1 £50K and Applicant 2 £60K Based on the gross amount used for affordability e.g. 100% of Basic Salary, 60% of Overtime.
First Time Buyers	Yes	Available to first time buyers.
Second Homes	Yes	Available on second homes.
Affordable Housing Schemes	No	Not available on applications involving Shared Ownership, Shared Equity, Help to Buy and Right to Buy schemes.
Debt Consolidation	Only available on a repayment basis	Any part of the lending being raised for Debt consolidation must be on a repayment basis only.
Other	The repayment vehicle must be in the name of the applicant(s) named on the mortgage: o For joint applications, it is acceptable for the repayment vehicle to be in the sole name of one of the applicants (except where the repayment vehicle is ‘sale of the security property’). o For sole applications, it is not acceptable to use a repayment vehicle that is in joint names. Repayment vehicles must be based in the UK and have a £ sterling denomination. The maturity or intended realisation date of any repayment vehicle used in conjunction with the mortgage must not exceed the term. More than one repayment vehicle can be used to cover the total interest only amount (except where repayment vehicle is ‘sale of the security property). The repayment vehicle(s) must be sufficient to support the lending and cover the full amount (including any product fees being added) to be conducted on an Interest Only basis.