Suffolk BS cuts interest-only rates and launches 90% LTV discount mortgage

Suffolk Building Society is making changes to its residential interest-only range, reducing rates across the range by up to 0.16%.

The Society says the changes will help to support borrowers changing repayment type due to the ongoing affordability challenges within the market, as well as supporting its core later life borrowers.

Available at 80% LTV, a two-year discount interest-only product has reduced to 4.85%, a two-year fixed rate has decreased to 4.99%, and a five-year fix is down to 5.09%.

Suffolk is also introducing a 90% LTV discount mortgage designed to help those with smaller deposits take advantage of the prospect of future Bank of England base rate drops.

The 90% residential mortgage is a two-year deal available for purchase or remortgage. It has a discount rate of 4.95% and a maximum loan amount of £650,000.

Charlotte Grimshaw, head of intermediaries at Suffolk Building Society, said: “There’s a strong focus on supporting first-time buyers at the moment – and so there should be; they underpin our housing market. However, interest-only borrowers, who often fall into the ‘later life’ group, have long been underserved – facing age restrictions and limited options. 

“With our changes to repayment vehicles, we decided to close the rate differential between our capital & interest and our interest-only products – giving people more choice. This helps borrowers who are looking to borrow into retirement, people currently on interest-only terms, or those looking to migrate over to interest-only.

“These rate reductions come on the back of the significant criteria change we made on Monday, increasing the maximum LTV from 50% to 70% when downsizing.”