The changes apply to the lender’s direct and intermediary channels.
From tomorrow, for applications up to 80% LTV, a maximum of 60% LTV can be taken on interest-only but the remaining 20% must be taken on capital and interest basis.
For applications over 80% LTV, borrowers must take out the loan on a capital and interest basis only.
Any outstanding interest-only applications up to 75% LTV can be submitted until close of business tonight, with the new rules taking effect from tomorrow morning.
The lender has not made any changes to its acceptable repayment vehicles.