Precise Mortgages is launching into the interest-only market, as revealed in this week’s Money Marketing.
The lender says it will lend at up to 75 per cent loan-to-value on an interest-only basis, as opposed to 80 per cent on a capital repayment basis, and will require a repayment vehicle to repay the mortgage’s capital. It says it may increase its current residential lending limit of £500,000 for interest-only mortgages, although no final decision has been reached.
Several lenders, including Lloyds, Northern Rock, and Coventry Building Society have tightened their interest-only criteria recently in anticipation of final proposals from the FSA in the mortgage market review. The regulator is looking to ensure borrowers have a repayment vehicle in place.
Precise is also looking to loosen its criteria for self-employed borrowers. From the end of July, the lender will accept self-employed borrowers with one full year of accounts, as opposed to its current requirement for two years of accounts.
Emba group sales and marketing director Mike Fitzgerald says: “This is good news. Lenders have taken a too heavy-handed approach to interest-only lending, whereas Precise are not following their lead.”