"Our interest-only offset combines the freedom of interest-only with the flexibility of offset."
The new products are capped at 50% LTV and are available on two and five-year fixed rate terms. There’s no minimum income requirement, but borrowers will need to demonstrate that they have sufficient income to support an equivalent repayment mortgage and meet all the repayment affordability checks.
To apply, borrowers must have a minimum of £300,000 equity left in the property after the mortgage amount required has been taken into account. Borrowers will also need evidence of an acceptable repayment plan, which could be the sale of investments or a property, or a pension lump sum, but needs to be based on current value, not projected forecasts.
Two-year fixed rates start from 1.47% with a £999 fee and a five-year fix is available at 1.95% with no fee. Offset products include a two-year fix from 2.29% with no fee and a five-year fix at 2.15% with a £999 fee.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “Now, more than ever before, borrowers are looking for control over their finances so we’re pleased to be re-entering the interest-only market.
“Interest-only products are ideal for borrowers who would like to reduce their monthly mortgage payments or free up cash that they can use in other ways. With our products, there’s also the option of using the sale of the property to repay the loan which makes downsizing a realistic option for repayment.
“Our interest-only offset combines the freedom of interest-only with the flexibility of offset. Borrowers will be able to access their savings whenever they need to and they may be able to borrow more at the same rate.
“There’s lots of information about the new range on the dedicated pages on our website, including case studies which will help brokers see at a glance which of their clients might suit an interest-only mortgage.”
