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RBS latest lender to restrict interest-only

The Royal Bank of Scotland has become the latest lender to restrict interest-only lending.

It will only lend to borrowers with a minimum income of £50,000 and who have banked with them for a minimum of three months.

Interest-only is also not available to first-time buyers but it will continue to be available up to 75% LTV.

The changes will apply to both brokers and its direct through branches channel.

Last week NatWest suspended its interest-only offering through brokers and pledged to relaunch products this week.

From tomorrow it is introducing two purchase mortgage deals to its corporate range that will also be available as interest-only options.

The two-year fixes are available at 2.89%, 60% LTV with a £999 feeand3.29%, 75% LTV with a £999 fee.

To be eligible for these deals a client must already have an active NatWest or RBS current account in which they have had a minimum of the last three months’ salary, of at least £1,000, paid into their NatWest or RBS current account

In addition to meeting the NatWest or RBS current account criteria, clients will need to earn a minimum of £50,000 pa gross basic salary.

This is before any regular overtime or bonus income is taken into account.

For joint applications, the main applicant must earn at least £50,000 gross basic salary.

Acceptable repayment vehicles include endowments, pensions and ISAs/PEPs. Enhanced repayment vehicles can be used provided the applicant fulfills additional criteria.

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  • Phil Shelford 27th March 2012 at 2:52 pm

    Guys, stop wasting your energy on something you cant change. Accept what is and move on. Life is too short. Concentrate on what you can affect.We should all be proactively ringing all our interet only clients preparing them for the change they need to make on their repayment strategies. See it for the sales opportunity it really is.

  • robert Lundon 27th March 2012 at 2:29 pm

    this banking group has become a total joke and wy dont they just be honest and say they are either unable or unwilling to lend. Just shut their mortgage dept down why are the taxpayers paying for staff of mortgage underwriting when they dont lend

  • colin 27th March 2012 at 2:02 pm

    You must earn a minimum of £50k a year, and have your salary paid in of at least £1000pcm………..

    £1k per month is about £16k pa………

    bizarre……..

  • John Crisp 27th March 2012 at 1:51 pm

    in other words “we don’t want to lend”

  • Lisa 27th March 2012 at 1:50 pm

    OMFG

  • colin 27th March 2012 at 1:43 pm

    Int Only – and only to clients who have banked with RBS/Nat West for three months……….and earn £50k

    where is all this going to end…….