We offer mortgages on a full or partial interest only basis.
If the total borrowing is over 75% LTV the full balance must be on a repayment basis.
All interest only borrowing must be supported with an acceptable repayment plan, which we’ll need to see evidence of before a mortgage offer can be produced.
ACCEPTABLE REPAYMENT PLANS
Below are the repayment plans we currently accept. Click on each one to see associated criteria, evidence required, and the assessment method we’ll use.
This information is a guide. We’ll only issue a mortgage offer once we’ve confirmed the evidence supplied meets our criteria for the amount required.
If your client has any of their existing debt on interest only they will need to provide evidence that they have a repayment plan in place to repay the capital at the end of the term.
If the Further Advance is to be conducted on an interest only basis, we will also require evidence of the repayment plan that your client intends to use to repay the Further Advance amount at the end of the term. This repayment plan must be from our acceptable list.
If the Further advance is to be conducted on a capital and interest repayment basis and your client has an existing interest only debt, they must still provide evidence that they have a repayment plan in place to repay the interest only capital balance at the end of the term.
Only where the evidence to support the Further Advance, as well as any existing interest only debt, meets our criteria and covers the full amount to be conducted on an interest only basis, can the Further Advance Offer be produced.
Product Transfers and Contract Changes
If your client has any of their existing debt on interest only they’ll need to provide evidence that they have a repayment plan in place to repay the capital at the end of the term.
A Product Transfer can only be completed once the repayment vehicle has been validated.
Exceptions which can be considered if customer does not meet lending rules
If an existing customer wants to amend their Scottish Widows mortgage and they do not meet current lending rules, we may consider allowing provided the amount of their current Interest Only loan and term are not increasing. Please refer to your BDM for guidance.