Metro Bank increases interest-only flexibility

Metro Bank increases interest-only flexibility

Metro Bank has refreshed its residential and buy-to-let mortgage range, including a rate reduction of 30 basis points and several policy changes.

The challenger bank will now allow up to 50 per cent of the property value, on properties valued above £2m, to be used as the repayment strategy on interest-only mortgages.

It will consider mortgages of more than £5m on a case-by-case basis.

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Additionally, Metro Bank will now accept a builder’s incentive of up to 5 per cent the purchase price, with residential houses and flats up to 85 per cent loan-to-value and buy-to-let houses and flats up to 75 per cent LTV.

A new range of three-year fixed rates for residential and buy-to-let mortgages has also been introduced.

Charles Morley, head of mortgage distribution at Metro Bank, said these initiatives should help support growth plans in the intermediary market throughout 2016.

He said: “Metro Bank is committed to offering the very best in service and convenience and these developments are in direct response to us listening to our broker partners, and follows the launch of our mortgage switching portal, which pays procuration fees to introducers.”

Alex Reynolds, independent financial adviser at Advies Private Clients, said: “It is great to see another bank offering a more flexible interest-only policy aimed at higher value properties with sufficient equity like a few other lenders currently offer, and a new range of three-year fixed rates also gives clients another option to consider.

“I expect Metro Bank to do a fair amount of business off the back of these changes.”