Precise enhances interest-only mortgage criteria

Precise has announced a series of enhancements to its residential interest-only proposition.

The lender has increased the maximum LTV from 65% to 75% and has removed the minimum equity requirement where the repayment strategy is the sale of the property, a shift designed to open up interest-only lending to a wider range of borrowers.

By raising LTV limits and removing equity thresholds, Precise aims to support customers looking to upsize using the sale of their property as their repayment vehicle. The widened criteria may also help those with less than perfect credit profiles who are seeking breathing space to rebuild their scores over time.

A clear and evidenced repayment strategy remains essential. Accepted routes include sale of the mortgaged property, savings or investments, pension lump sums, or the sale of an additional property.

Adrian Moloney, lending distribution director at OSB Group, said: “We’re really proud to introduce these affordability enhancements, following direct feedback from brokers and the recent launch of our 40 year term. Today’s changes ensure more residential customers can benefit from appropriate affordability support where interest-only is suitable.

"With the ONS reporting continued house price growth, our focus on flexible affordability solutions is more important than ever. We’ll keep listening to our intermediary partners and evolving our proposition to support responsible lending.”