April Mortgages has launched a range of residential interest-only mortgages which allow homeowners to borrow up to six times their income.
To qualify for April’s highest loan to income (LTI) ratio, homeowners must have at least £200,000 of equity in their home, or £300,000 in London and lending cannot exceed 60% loan to value.
The mortgages, which start from 5.25% and are fixed for five years, have no early repayment charges for borrowers moving home or redeeming the loan in full from their own funds.
The range is available to first-time buyers and remortgage customers with five-, 10- and 15-year fixed rates starting at 5.25%, 5.25% and 5.36% respectively.
Loan terms of between five and 40 years are available and loan sizes range from £50,000 to £1m.
The deals also come with uncapped overpayments to allow borrowers to reduce their balances quicker without incurring any penalty.
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Need for modernisation
Rachael Hunnisett (pictured), director, April Mortgages, said: “The interest-only market has been crying out for modernisation for many years.
“While the number of interest-only mortgages has been falling in recent years, we firmly believe they are an important tool that gives homeowners greater control over their finances and the ability to manage their mortgage payments more effectively.
“For example, in the current interest rate environment, many older homeowners with significant equity could benefit from interest-only arrangements as they transition towards retirement ahead of downsizing.”
Earlier this month, Leeds Building Society released a mortgage that will allow first-time buyers to use up to five-and-a-half times their income to get a mortgage, which it said could boost loan amounts by £66,000.
