Principality Building Society restricts interest-only

Principality Building Society is restricting its interest-only offering to just three products.

The Welsh lender is still offering interest-only or part interest-only deals up to 85% LTV.

Its 85% LTV deal is available on a three-year discount rate, with a discount of 0.3% from its SVR, currently 4.99%.

It also has a £999 product fee and £150 discharge fee.

The lender is also offering 75% and 50% LTV deals available at a three-year 0.5% and 1.4% SVR discount respectively.

All deals allow early repayments of up to 3% until the end of May 2015.

Interest-only was previously available at Principality on a wider range of products including fixed rate deals.

It follows moves by a number of lenders to restrict interest-only in different ways from stricter criteria to lowering LTVs.

A spokeswoman for Principality says as other lenders have withdrawn from interest-only they have decide to restrict it to manage volumes.

She says: “Recognising that some borrowers may need a higher LTV we have not restricted this but have ensured that varying degrees of LTV are still available for these borrowers.”