Summary:
Specialist lender Hodge has announced it will now accept an 80% loan-to-value (LTV) on interest-only mortgages, aiming to address affordability challenges for borrowers. This policy applies to both their Resi and Resi Retire product ranges, regardless of the borrower’s age. The lender will accept the sale of the property as a repayment strategy up to 75% LTV, with the remaining 5% covered by a secondary repayment vehicle. Hodge emphasizes flexibility, with no minimum income requirements and a minimum property value of £500,000 at 80% LTV. This move is part of Hodge’s effort to ease financial barriers for mortgage customers.
What This Means for You:
- Increased Accessibility: Borrowers now have access to higher LTV interest-only mortgages, making homeownership or refinancing more achievable.
- Flexible Repayment Options: Hodge allows the sale of the property to cover up to 75% of the loan, with additional repayment strategies for the remaining balance.
- No Age Restrictions: This policy is available to borrowers aged 21 and above, including those in retirement, offering long-term financial planning opportunities.
- Monitor Affordability: While this provides flexibility, ensure you have a clear repayment strategy to avoid future financial strain.
Original Post:
Specialist lender Hodge will now accept 80% loan-to-value (LTV) on interest-only mortgages as part of an affordability push.
This will apply to the lender’s entire Resi and Resi Retire ranges regardless of a borrower’s age.
Hodge business development director Emma Graham said: “It’s essential for us to keep an open dialogue with brokers to help us understand the challenges mortgage customers are facing. Time and again we hear affordability is proving a sticking point for many clients, we hope increasing the LTV on interest-only mortgages will help break some of that stickiness down.”
The lender will accept sale of property up to 75% LTV, with the remaining 5% funded through a second repayment vehicle. There are no minimum income requirements. Hodge will require a minimum interest-only property value of £500,000 at 80% LTV. Hodge lends from age 21 until post-retirement.
Extra Information:
Hodge Lifts Max LTV to 95% – Learn more about Hodge’s recent LTV changes.
Understanding Interest-Only Mortgages – A guide to help borrowers navigate interest-only mortgage options.
Interest-Only Mortgage Repayment Strategies – Explore various strategies to repay interest-only mortgages effectively.
People Also Ask About:
- What is an 80% LTV mortgage? – An 80% LTV mortgage means the loan covers 80% of the property’s value, with the borrower providing a 20% deposit.
- Are interest-only mortgages risky? – They can be if borrowers fail to have a solid repayment plan in place by the end of the term.
- Can retirees get interest-only mortgages? – Yes, Hodge offers interest-only mortgages to borrowers of all ages, including retirees.
- What are the benefits of higher LTV mortgages? – Higher LTV mortgages reduce the upfront deposit required, making homeownership more accessible.
Expert Opinion:
Hodge’s move to increase the LTV limit on interest-only mortgages reflects a growing trend in the lending industry to address affordability challenges. While this provides greater flexibility, borrowers must ensure they have a robust repayment strategy, particularly in uncertain economic climates.
Key Terms:
- 80% LTV interest-only mortgages
- Mortgage affordability solutions
- Interest-only mortgage repayment strategies
- High LTV mortgages for retirees
- Flexible mortgage lending options
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