Northern Rock will no longer accept certain repayment vehicles on its interest-only mortgages from Tuesday.
It will not accept inheritance, bonuses, dividends, regular overpayment and an intention to convert to repayment at a future date as acceptable repayment vehicles.
In March the lender reduced its maximum LTV from 85% to 75% for interest-only.
In addition, the acceptance of sale of property as a repayment vehicle will be limited to cases with a maximum LTV of 60% and £150,000 minimum equity.
A spokesman for Northern Rock says every case will now be assessed on an individual basis and an acceptable type of repayment will be something such as savings or other assets.
He says the move has been taken to maintain its position as a responsible lender.
It will continue to accept decisions in principles on the outgoing policy until close of business 28 May 2010.