The Nottingham, has revised its interest only mortgage terms, now accepting the Sale of Mortgage Property (SOMP) as a viable repayment method.
This change is designed to offer more options to borrowers and brokers during the ongoing financial challenges.
Interest only mortgages, where borrowers pay only the interest during the loan term, have been increasingly popular.
Traditionally, borrowers had several repayment methods available for the capital at the term’s end, including pension plan lump sums and the sale of secondary properties.
Now, SOMP joins the list, allowing borrowers to sell their main home to settle the mortgage.
Currently, The Nottingham caps interest-only mortgages at an 80% loan-to-value (LTV). For those opting for the SOMP method, the LTV is limited to 60%, requiring a minimum equity of £200,000, or £300,000 for properties in London and the South-East. The society also offers the flexibility to combine SOMP with other repayment strategies.
Alison Pallet, sales director at The Nottingham, said the society remains focused on meeting the needs of brokers and borrowers. “We’re adjusting our offerings based on market changes and the economic environment, ensuring our customers have diverse solutions.”
Richard Merrett from SimplyBiz commented on the shift, noting the timeliness of this enhancement to the interest-only option amidst rising costs for borrowers. “The Nottingham’s move is a positive step, offering a distinct choice compared to other market offerings,” Merrett said.
