The interest-only mortgage is being re-introduced by NatWest Intermediary Solutions from 21st September. The product will only be available to residential customers and will have strict criteria in place.
According to the head of NatWest Intermediary Solutions, Graham Felstead, a recent review of the market revealed that interest-only mortgages were still in demand. He said:
“The mortgage market is currently a very dynamic one which is set to continue on its growth path. We have enjoyed great support from the broker market this year and look forward to continuing to help more and more customers with their borrowing needs for the rest of 2015 and beyond.”
The communications associate director of London & Country Mortgages, David Hollingworth, said that NatWest was the first high street lender that had previously stopped offering interest-only mortgages, to re-introduce them. According to Hollingworth, the NatWest has realised that the product is suitable for the right type of borrowers, which are those who can demonstrate an ability to repay the mortgage at the end of the term. Among the criteria from the NatWest is income above £100,000 per annum, a 75 per cent maximum loan to value and to be able to demonstrate how the loan will be repaid.
The Citizens Advice Bureau recently warned of one million borrowers who had interest-only mortgages, with no means of repaying the outstanding loan. Those people face losing their home at the end of the term. A mortgage adviser who is qualified to CeMAP level can help borrowers to make sure they are applying for the most suitable mortgage product.
