Hodge Bank has increased its loan-to-value (LTV) on interest only mortgages to 80%, aiming to help borrowers maximise affordability.
This change applies across the lender’s resi and resi retire range, regardless of the borrower’s age.
Borrowers can access up to 80% LTV on interest only up to £2m, and 75% LTV up to £3m.
The sale of property is accepted up to 75% LTV, with the remaining 5% covered by a second repayment vehicle.
There are no minimum income requirements and interest only is assessed on an interest only basis for affordability.
The minimum property value is set at £500,000 for interest only at 80%.
Emma Graham, business development director at Hodge, said: “It’s essential for us to keep an open dialogue with brokers to help us understand the challenges mortgage customers are facing.
“Time and again we hear affordability is proving a sticking point for many clients, we hope increasing the LTV on Interest Only Mortgages will help break some of that stickiness down.”
Hodge has made these changes as part of a wider push to make its underwriting more flexible for borrowers.
Rob Ford, head of mortgage origination at Hodge, said: “We know customer needs are changing.
“Whether that’s older borrowers hoping to make the most of retirement, or younger borrowers earning income from multiple sources.
“Lifelong lending is slowly becoming the rule rather than the exception and Hodge Bank is doing what it can to make those borrowers’ aspirations a reality.”
