Nationwide Building Society Group has cut the Loan to Value (LTV) limit it is willing to lend on its residential interest-only lending from a maximum of 75% LTV to 50%, effective tomorrow.
This change is in response to changes made by other lenders and takes effect as of 21 March 2012, it said.
Martyn Dyson, head of mortgages at Nationwide, said: “A number of major lenders have recently restricted their criteria for interest-only mortgages and Nationwide needs to be able to manage application levels in a prudent and sustainable manner.”
It said affordability continues to be assessed on a capital and interest repayment basis and buy-to-let mortgages through TMW are unaffected.
Santander became the first lender to tighten its interest-only criteria a few weeks ago, swiftly followed by Halifax, Leeds Building Society and Yorkshire Bank.
