Interest Only mortgages
With an interest only mortgage you will only make payments towards the interest on the amount you've borrowed. This means that you will still owe the full amount borrowed at the end of your mortgage term.
You will need to have a clearly understood and credible repayment strategy* in place to repay the amount borrowed at the end of the mortgage term.
Part & Part mortgages
It is possible to split a mortgage between two repayment methods, interest only and repayment (capital and interest). This means that you will repay part of the mortgage balance as repayment and the other part as interest only. This will reduce your mortgage balance at the end of your term, although you will still have an amount of the capital to pay back.
What does Leeds Building Society offer?
On 12th September 2016, we updated our interest only mortgage criteria.
Here's what that means for you:
- Our maximum loan for interest only mortgages has gone up from 50% to 60% Loan to Value (LTV). This means that you can borrow up to 60% of the value of your property on an interest only basis.
- If you take out a part and part mortgage, you can still borrow up to 75% LTV. Up to 60% of the mortgage can now be paid back on an interest only basis.
- We've also changed our criteria for people who want to pay back their mortgage by selling their home and moving to a smaller one. The old criteria required a fixed amount of equity in the property, but the updated criteria takes into account regional differences in property prices. When you apply, we need you to tell us whereabouts you'd like to downsize to at the end of your mortgage. We'll then carry out a check to make sure your plan is plausible.
We've changed the information below to reflect the criteria updates.
We offer a range of products for customers looking to borrow up to 60% or up to 75% of the value of the property (LTV).
For customers looking to borrow up to 60% LTV:
- The whole mortgage can be on interest only.
- You can choose to take a Part & Part approach for any combination of your choice.
- Selling your property and downsizing can be used as a repayment strategy, but we'll have to carry out a check to make sure your plan is plausible.
For customers looking to borrow between 60% and 75% LTV:
- Up to 60% of the value of the property can be borrowed on interest only. The remaining amount (up to 15%) must be on repayment.
- Selling your property and downsizing can be used as a repayment strategy, but we'll have to carry out a check to make sure your plan is plausible.
When applying for an interest only mortgage, you will need to have a clearly understood and credible repayment strategy in place to repay this. All repayment strategies will be subject to approval by our mortgage underwriters.
Find out more information on interest only repayment strategies.
You can choose from applying online** (unless stated below) or over the phone. You can also use our mortgage calculator and get a decision in principle today.
Warning: THE MORTGAGED PROPERTY (WHICH MAY BE YOUR HOME) MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE