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NatWest drops interest-only for first-time buyers

NatWest Intermediary Solutions has stopped offering interest-only mortgages to first-time buyers.

Any first-time buyer who applies for a mortgage with NatWest Intermediary Solutions – and from the RBS Group – from today will do so on a capital repayment basis.

However, interest-only loans are still available at up to 75 per cent loan-to-value for all other buyers.

Coventry Building Society, Northern Rock and Lloyds Banking Group have all tightened their interest-only lending policy this year.

A spokesman for NatWest Intermediary Solutions says: “As a responsible lender, it is prudent for first-time buyers to build up equity in their property by reducing their capital from day one, particularly in times of economic uncertainty.

“Repaying capital from the outset will help to protect first-time buyers from the possible threat of negative equity in the future. In turn, this will make it easier for first-time buyers to eventually move up the property ladder, as they will have a better chance of building up sufficient equity in their property to provide them with the level of deposit needed for their next house move.”

NatWest Intermediary Solutions has also today made a number of changes to its mortgage and remortgage products.

In its core range, the lender has reduced the rates on its 70 and 80 per cent loan-to-value mortgages, by 0.10 per cent to 3.50 per cent and 0.50 per cent to 5.29 per cent respectively.

Its two-year fixed rate 80 per cent LTV purchase product has increased by 0.10 per cent to 5.29 per cent with the two-year tracker and five year fixed rate 60 per cent LTV mortgages increasing by 0.20 per cent.

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