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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 per cent LTV.

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

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

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

All deals allow early repayments of up to 3 per cent 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A spokeswoman for Principality says as other lenders have withdrawn from interest-only they have decide to restrict it to manage volumes.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.”

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