Yorkshire Building Society is bringing back interest-only mortgages — years after they almost vanished over fears customers may be unable to pay their debt.
The Yorkshire already offers interest-only mortgages through brokers, but plans to start selling them directly via its 240 branches and agencies within months.
Yorkshire Building Society plans to start selling interest-only mortgages directly via its 240 branches and agencies
Customers can borrow a lump sum and make only the monthly interest payments.
The initial amount borrowed is then paid back at the end of the term.
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On a £150,000 loan at 4 per cent taken over 25 years, for example, you would only pay £500 a month, compared to £792 with a regular repayment mortgage.
Mike Regnier, chief executive of the Yorkshire, says: ‘For certain types of customers, particularly those with more variable income, interest-only mortgages are absolutely the right choice.’