Kensington has extended its maximum LTV on interest-only loans to 75 per cent.
Previously, it would lend to 50 per cent LTV with a “plausible” repayment strategy but has extended this to 75 per cent for those earning £75,000 or more, again with a plausible repayment strategy.
Examples of what the lender deems plausible are the sale of the property, the sale of unencumbered second properties or buy-to-lets.
Further examples include share portfolios, Isas, bonds, endowments, unit trusts or the borrower’s pension.
Kensington head of sales and marketing Sarah Green says: “A healthy mortgage market is one that is diverse, with a variety of options for different types of customer. While interest-only is certainly not for everyone, it can be the right option for some customers with larger incomes and access to alternative repayment options.
“As Kensington underwrites each case on its own merits, we are able to give careful consideration to all of the circumstances around an application. This includes the plausibility of the repayment strategy and a true assessment of all aspects of a customer’s income, including variable income such as bonus, overtime, investment or vested shares.”