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The return of the interest‑only mortgage

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From the today's Times. The comments are interesting too.


Coventry Building Society last month re-entered the interest-only mortgage market. Customers can convert to interest-only on a temporary or permanent basis, depending on their ability to clear the debt at the end of the loan term. The society said that it shouldn’t be seen as a way of just reducing monthly payments, but rather a way of managing their money and assets in a different way.

Coventry is one of the few lenders (Accord Mortgages, part of Yorkshire Building Society, is another) that does not have a minimum income requirement for new interest-only customers, but you cannot borrow more than half the value of your home and must have at least £300,000 equity. Acceptable repayment strategies include the sale of investments, using a pension lump sum or selling your home.



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