The lender has taken the decision to implement a minimum loan size of £300,000 in order to target ‘affluent’ customers only. The changes will come into force tomorrow, Wednesday 7 November.
Woolwich said that the move would not affect the majority of its interest-only customers and that it was simply aligning its policy with its average customer profile.
Mortgage Solutions understands the lender has seen a significant increase in interest-only mortgages being placed since Nationwide withdrew from the sector in October.
A Woolwich spokesperson told Mortgage Solutions: “For interest-only mortgages we are aligning the minimum loan size to our average customer profile as this method of funding a mortgage is proving more popular amongst the affluent borrower, from tomorrow the minimum loan size will be £300,000.
“We’ve seen lots of movement in the interest-only market but the majority of our customers on interest-only are borrowing over £300,000 as the product is more suited to affluent borrowers.”