NatWest Intermediary Solutions is to temporarily stop lending on an interest-only basis.
From March 23, NIS will only offer residential mortgages on a capital repayment basis only. The move does not affect the direct brands within the Royal Bank of Scotland Group.
The move is temporary and the lender will reintroduce an interest-only option on selected mortgages next week. It was lending up to 75 per cent LTV on an interest-only basis.
Earlier this week, both Nationwide Building Society and Coventry Building Society cut their maximum LTV for interest-only lending from 75 per cent to 50 per cent. These moves followed Santander’s decision to cut its maximum LTV on interest-only to 50 per cent in February.
Woolwich, Clydesdale Bank and Halifax have also made changes to their interest-only criteria recently.
A NatWest spokesman says: “This decision reflects the rapidly changing market conditions. It is important to note that our full range of mortgages is still available on a capital repayment basis.”