Nationwide cuts interest-only LTV to 50%

20 March 2012 | By Natalie Thomas

Nationwide Building Society is slashing its interest-only LTV for residential lending from 75% to 50%.

The society says the change is in response to changes made by other lenders and takes effect tomorrow.

Martyn Dyson, head of mortgages at Nationwide, says: “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.

“The group is therefore amending its policy to a maximum of 50% LTV.”

Nationwide lowered its LTV for interest-only to 75% in April 2011, it previously offered 85% LTV.

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Readers' comments (28)

James Lindon-Travers | 20 Mar 2012 10:30 am
Another nail in the coffin - last one out turn the lights out!
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Anonymous | 20 Mar 2012 10:43 am
To quote - “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." Therefore a decision made not in the best interests of clients or their needs, moreover a commercial decision to mange application levels - how does that sit with the principals of TCF?
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Anonymous | 20 Mar 2012 10:45 am
Not a surprise. Pure interest only will be gone within a year. Only mugs see any future in being a mortgage broker going forward
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Andrew Haynes | 20 Mar 2012 11:16 am
Why can't the 50% limit, or whatever percentage limit an individual lender wants apply, only apply to the interest only portion of the loan and not the entire loan where it is part and part? What is wrong with having 50% on interest only and 25% on repayment? Why do so few lenders have this more common sense approach? I appreciate the risk aspect of providing interest only, but surely this is more TCF?
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Anonymous | 20 Mar 2012 11:24 am
Well I can blow the 'manage application levels in a prudent manner' argument - I got an email from a recruitment agency in Bournemouth last night asking me if I knew of up to 25 people who could work immediately at Nationwide..
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Bobby | 20 Mar 2012 12:12 pm
The ONLY future for the intermediary is to leave the industry, as I have decided to do this week after 20 years or work as a mortgage " advisor " at a Bank or Building Society. There is no other future.
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Ancient Wisdom...is a mortgage broker in N3 | 20 Mar 2012 12:16 pm
WTF! Why not abolish interest only altogether for residential mortgages?

...oops, looks like we are heading that way already.

Property prices are in line for big falls now its so hard to get a mortgage that is affordable - all the estate agenst I deal with are saying there is less stock coming on because people cant afford tough new criteria!
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Mark Finnegan | 20 Mar 2012 1:08 pm
For all of you that will be leaving the industry - please give me a call at Complete Mortgages Guildford (Google it) and I'll happily take on your client banks.
Will give you a cut of the first deal for each client.
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Des Platt | 20 Mar 2012 1:16 pm
Have to agree with Bobby. I am retiring at the end of this year; decision made last year.I love the clients and they've been a joy to work for but hate most of the lenders apart from a few mutuals I could never go back to selling the banks and building societys rubbish insurances.Not that I ever did much interest only but it does seem symptomatic of a dying industry
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Luke Atkinson | 20 Mar 2012 1:43 pm
Bobby - you've been threatening that for months, just do it!

The problem will arise when interest rates rise, mark my words. House prices are bound to fall when no one can remortgage - self cert, sub prime and now interest only mortgage prisoners - be interesting to see the % of mortgaged homes this affects?
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