Santander is extending its maximum interest-only lending age from 65 to 70. This is very welcome news from one of the biggest players in the market as interest only continues to play a significant role for many borrowers. This is especially true of those in receipt of bonus income and with a credible repayment strategy for repaying their mortgage over and above fixed monthly reductions.
The older borrower very often has more options available to them in terms of repayment strategy but has in recent times struggled to qualify for interest-only loans simply because of their age. By extending the age bands, Santander is extending its reach to this credible and affluent market.
Santander is also removing the minimum gross income level for interest only, which is another welcome addition that benefits younger borrowers who require an interest-only mortgage.
This move pitches Santander and Barclays into a potential policy and criteria war, which can only help borrowers for whom interest only is a key driver as it increases the options available to them at competitive rates.