Clydesdale Bank has expanded its interest-only and part & part lending criteria, increasing maximum loan-to-value (LTV) limits and introducing a revised affordability assessment to help brokers place more cases. The updates are live now and apply across the lender’s full range of accepted repayment vehicles.
For loans up to £1.5m, borrowers can now access up to 85% LTV on a part capital and interest, part interest-only basis, with up to 75% LTV permitted on an interest-only structure.
Any borrowing above 75% LTV must be taken on a capital and interest basis. For loans above £1.5m, Clydesdale has also removed its previous 70% LTV restriction for downsizing, meaning borrowers can now use downsizing as a repayment vehicle up to 75% LTV.
The new LTV limits are set at 75% for interest-only and 85% for part & part between £80,000 and £1.5m; 75% and 80% for loans up to £2.5m; 75% for both up to £5m; and 60% for both up to £10m.
The lender has also overhauled its affordability approach, with calculations now based on the actual repayment type rather than assuming capital and interest payments, enabling greater borrowing potential for eligible clients.
Other changes include the removal of debt consolidation from interest-only lending unless the funds are used for property improvement or repair.
Clydesdale has also clarified that second home lending does not require a minimum equity amount, unlike downsizing cases, and refined its criteria for using sale of another property, cash savings, or investments as repayment vehicles.
Richard Walker, head of intermediary sales at Clydesdale Bank and Virgin Money, said: “Clydesdale has built a strong reputation for its interest-only offering, and brokers consistently tell us their clients appreciate the flexibility it provides.
“We’re committed to evolving our support to meet customer needs, and this enhancement will give borrowers using interest-only or part & part more options to align their mortgage strategy with their broader financial goals.”
