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Principality cuts back interest-only but keeps 85% LTV deals

Principality Building Society is restricting its interest-only offering to just three products but has retained its 85 per cent loan-to-value ratio mortgage.

Interest-only was previously available on Principality’s entire range but it will now be restricted to the society’s 85 per cent, 75 per cent and 50 per cent LTV deals.

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

The 75 per cent and 50 per cent LTV deals are available at a three-year 0.5 per cent and 1.4 per cent SVR discount respectively. The changes apply to both brokers and direct channels.

Last month, Skipton Building society cut its maximum LTV from 75 per cent to 60 per cent, while Leeds Building Society, Nationwide Building Society and Coventry Building Society all cut their maximum LTVs from 75 per cent to 50 per cent.

In February, Santander reduced its maximum interest-only LTV ratio from 75 per cent to 50 per cent.

Chadney Bulgin mortgage partner Jonathan Clark says: “This move still gives consumers a good option because Principality has not cut its loan-to-value ratios like others have.”

A Principality spokeswoman says: “Recognising that some borrowers may need a higher LTV, we have not restricted this.”


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