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Interest only exclusive for contractors

Interest only exclusive for contractors

August 26th, 2016

Contractor Mortgages Made Easy are delighted to announce the latest exclusive deal from Scottish Widows secured exclusively for Contractor Mortgages Made Easy clients.

Scottish Widows bank have announced that a new pilot will offer a much more flexible approach to interest-only lending for contractors and freelancers.

What is the new policy?

The exclusive pilot from Scottish Widows will enable contractors to borrow up to a 90% loan-to-value (for a purchase or remortgage), with up to 50% of that loan-to-value on an interest-only basis. This interest-only element will mean that a lower monthly mortgage payment would be available to contractors, compared with a full repayment mortgage option.

Within the terms, Scottish Widows will then accept the sale of the mortgaged property as a repayment vehicle for the interest-only element of the loan, provided that there is more than £200,000 of equity in the property, taking account of the capital repayments that would have been made on the repayment portion of the mortgage over that time.

What are the benefits for contractors?

Because of the nature of contractor work, flexibility is key. Varying income from different contracts can change your monthly incomings, therefore keeping monthly mortgage payments lower can give contractors the flexibility they need to take a break or invest their money in other ways.

Scottish Widows also offer an offset option, where they can use their savings to ‘offset’ the interest owed on the mortgage, giving contractors even more flexibility and the potential to save larger amounts in mortgage interest over the whole term of the loan.


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