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Virgin Money follows the fashion and limits interest-only to 70% LTV

Virgin Money has become the latest lender to rein in its interest-only lending.

The lender will accept interest-only up to a maximum LTV of 70% only, down from 75%.

It has also restricted the repayment methods so clients 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.

All decisions in principle and pipeline applications agreed before last Thursday 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 size or term.

Speaking at the Mortgage Business Expo in Manchester earlier this month, the Financial Services Authority claimed that it was not responsible for lenders cutting their interest-only lending.

It said that it had not responded to demands from some in the industry to ban interest-only in their feedback to the Mortgage Market Review.

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