A spokesperson at the lender confirmed that Natwest was gearing up to re-enter the market imminently but was unable to provide further details.
Natwest and Royal Bank of Scotland ceased to offer interest-only mortgages to new customers in December 2012, but has continued to offer buy-to-let products on this basis.
In further product developments, from tomorrow the loan size on Natwest’s buy-to-let range will be raised to £2m, with amendments to criteria meaning professional landlords will be eligible to apply.
Natwest said it will now consider applications from customers who derive more than 30% of their income from rental properties.
Its maximum loan limit of £500,000 has been scrapped and upped to £2m, while the rental cover calculation will remain at 125% x 5.5%.