We now accept the Sale of Mortgage Property as a repayment vehicle for interest-only mortgages.
The ongoing cost of living crisis continues to bite hard and with thousands of fixed term deals coming to an end this year, many households are facing the prospect of unaffordable monthly mortgage repayments.
As a mutual, we want to do everything we can to help borrowers and we believe our latest criteria change will give your customers a great option to make their monthly mortgage payments more manageable.
What's new?
Borrowers with at least £200k equity in their property (pre-application £300k in London and the South East) can now take out an interest-only mortgage and pay back the sum at the end of their mortgage term using proceeds from the sale of the property.
This means they’ll no longer require a separate repayment vehicle, such as a pension plan lump sum, stocks and shares ISA or the sale of an investment property or second home.
Borrowers also have the flexibility to use a combination of repayment and interest-only methods.
Key details
- SOMP as primary repayment method: Up to 60% LTV.
- Part repayment and part interest only: Interest-only element up to 80% LTV and can use more than one repayment method but SOMP part has maximum of 60% LTV.
- Interest-only, using additional repayment vehicle: Up to 80% LTV on interest-only using one of our other stated repayment vehicles or SOMP up to 60% LTV, plus one of our stated repayment options.
- No minimum income requirement.
A greater level of flexibility
Commenting on the latest changes, Sales Director Alison Pallett said: “At Nottingham Building Society, we’re committed to empowering borrowers through innovative solutions and we continue to evolve our services to meet the dynamic needs of customers and to provide them with a greater level of flexibility.
“Adding SOMP as a repayment vehicle is a great example of this. The flexibility and financial benefits of SOMP create a valuable avenue for borrowers seeking alternative ways to meet their mortgage obligations, either in the short or long term.”
A true differential proposition
Providing an industry view of the change, SimplyBiz Director of Strategic Relationships (Mortgages), Richard Merrett, said: “It is great to see the interest-only enhancement from Nottingham Building Society. At a time when costs are rising for all borrowers, interest-only, allowing flexibility over when and how a customer repays the debt, has become increasingly attractive.
“In allowing Sale of Mortgage Property to 60% LTV, alongside the ability to mix and match with other repayment vehicles to 80% and, crucially, no minimum income requirement, Nottingham Building Society are offering a true differential proposition to some of the other criteria requirements in the market.
“This follows a raft of other positive recent improvements, including the ability to secure rates at DIP stage. All of these combine to demonstrate they are putting both broker and customer at the heart of their strategy.”