Lender lifts LTV cap and scraps equity floor for sale-of-property repayment plans
Specialist lender Precise has overhauled its residential interest-only range, in a move aimed at giving intermediaries greater latitude when arranging affordability solutions for clients.
The lender has extended interest-only loan-to-value (LTV) availability to 75% and removed its previous minimum equity requirement where the customer intends to clear the debt through the sale of the mortgaged property. The changes are designed to make interest-only borrowing accessible to a broader set of borrowers, subject to repayment strategy and underwriting.
The updated range includes two- and five-year fixed-rate options. Eligibility is now largely determined by LTV and the viability of the proposed repayment vehicle rather than by set equity thresholds.
Among the key changes, there is no longer a minimum equity requirement where the loan will be repaid via sale of the property – previously a £150,000 equity floor applied. In addition, the maximum interest-only LTV has been increased from 65% to 75%.
Precise said the revised criteria are expected to support borrowers looking to move up the housing ladder using the eventual sale of their home to redeem the mortgage.
“We’re really proud to introduce these affordability enhancements, following direct feedback from brokers and the recent launch of our 40 year term,” said Adrian Moloney (pictured top), group lending distribution director at OSB Group. “These changes ensure more residential customers can benefit from appropriate affordability support where interest only is suitable.
“With the ONS reporting continued house price growth, our focus on flexible affordability solutions is more important than ever. We’ll keep listening to our intermediary partners and evolving our proposition to support responsible lending.”
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