Virgin Money is changing its policy for new interest-only residential mortgage lending.
The lender will now only accept interest-only cases with a minimum loan size of £300,000. The same policy will also apply for part capital repayment and part interest-only cases.
Interest-only and part repayment/part interest-only Decisions in Principle (DIPs) on the current policy will be honoured, subject to the usual 90 day validity period.
The revised policy will be applied to all DIPs submitted after 11pm on 8 January 2013.
Existing Virgin Money customers who want to port their mortgage to a new property, or who want to remortgage to a new Virgin Money product, are able to do so on their existing interest-only arrangements providing there are no material changes to the loan (such as an increase in loan size).
Existing interest-only customers who want to increase their loan size can apply for the additional lending on a repayment basis if their loan is below £300,000.
There are no changes to Virgin Money’s interest-only policy on buy-to-let loans.
Pete Ball, product and commercial director at Virgin Money, said: “While some lenders have chosen to withdraw from interest-only lending completely over recent months, we believe that it remains an important part of the mortgage market for customers who can demonstrate confidence in repaying their loan at the end of its term through a clear and evidenced repayment plan.
“We have updated our lending policy, although there are no changes for existing Virgin Money customers who can continue their mortgage under their current arrangements.”
