UK lender, the Clydesdale Bank is introducing changes to its mortgage range that will see what it describes as an innovative approach to Interest Only mortgages, it has announced.
The changes, which take effect from 21 January, will see the launch of a unique mortgage product and a rationalisation of how interest only mortgages are offered by Clydesdale Bank.
The new product is called the Low Start Mortgage, and combines the lower payments of Interest Only with the long term security of a repayment capital and interest loan.
Borrowers take a mortgage with an initial three year fixed rate loan on Interest Only terms, at the end of this the loan reverts to Standard Variable Rate on Repayment terms for the remaining life of the mortgage.
The lender said that the Low Start Mortgage addresses a need within the market, while appreciating the need to ensure repayment of the capital. Initially it will only be available through mortgage brokers and the maximum loan amount is
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