Salt's Approach to Interest Only Loans

We will continue to accept applications on an interest only basis, with the following considered as acceptable methods of repayment of the loan at the end of the term:

Sale of property.

Acceptable on buy to let or second homes without any further information required.

For residential mortgages, we will need to consider and investigate the applicant’s actual intention to ensure this is plausible.

Savings / Investments.

We will assess a customer(s) ability to save sufficient to repay the loan at the end of the term where this is stated as the vehicle for repayment of an interest only loan.

Other.

Examples of ‘other’ could be:

Conversion to repayment method
We will need to ascertain when the conversion will take place and apply a reasonability test to both the reason and the resultant capital and interest affordability.

Downsize
The circumstances, taking account of the amount of equity at application and mortgage term, have to reasonably allow for sufficient equity at the end of term to enable a smaller / cheaper property to be purchased.