Virgin Money has cut the maximum LTV on interest-only deals from 75% to 70% from today.
It has also restricted the repayment methods it will accept so that borrowers using the sale of another property will only be able to borrow 60% LTV.
Sir Richard Branson’s bank says this brings it into line with the maximum LTV permitted where sale of the mortgaged property is the designated repayment vehicle.
The changes apply to all new Decisions in Principle generated from May 31.
All DIPs and pipeline applications which have been agreed prior to the new policy will be honoured.
Existing customers can port their mortgage to a new property or remortgage to a new product with Virgin on their existing interest only arrangements, providing there are no material changes to the loan, such as an increase in loan size or term.