Nationwide gets tougher on interest-only mortgages

Published 11th Apr 2011

Borrowers who apply for a Nationwide Building Society interest-only mortgage will have to put down a bigger deposit than those who want a repayment loan.

Nationwide on Wednesday set a new limit of 75 per cent of a property's value for interest-only applicants. Such borrowers were previously offered loans up to 95 per cent.

This brings Nationwide into line with other lenders that have steered away from high-value interest-only lending in recent months.

Lloyds Banking Group, which includes the giant Halifax mortgage brand, took a similar step last month.

But Nationwide has said that existing borrowers who have interest-only arrangements, where their share of equity is under 25 per cent, will not be affected. And they will still be able to switch to other Nationwide deals.

Source: ' ThisIsMoney '

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