Following on from our blog on November 1st regarding tougher lending rules, the UKs second biggest mortgage lender, Santander, has eased its interest only criteria.
The clampdown on interest only mortgages reported earlier this month meant it would be less affordable for first time buyers to get on the property ladder, needing large deposits and only ever paying the interest on the loan and not the loan itself.
Despite many lenders cutting back on their interest-only deals, Santander have halved the deposit required to access and interest only deal to just 25%. Those with less than a 50% deposit will be able to take half their loan on interest only and the rest on a more expensive capital repayment basis.
It was also reported that borrowers would be permitted to repay the loan through the sale of the property, rather than being required to prove that they can repay the loan in full by way of savings or investments.