ING Direct has cut its maximum LTV for interest-only lending to 50% from 75%.
Borrowers can top up their borrowing to 80% LTV, as long as 30% is on a capital repayment basis.
It has also changed its criteria for repayment vehicles. Where the sale of a property is being used, borrowers must have a minimum £165,000 equity in the property and cash ISAs will no longer be acceptable.
Endowment or pension plans can be used where the provider’s mid-point projected value is sufficient to repay the interest-only element. Unit trusts and stocks and shares ISAs are also allowed.