Skipton Building Society is to cut its maximum loan-to-value for interest-only lending from 75 per cent to 60 per cent.
The changes apply to the lender’s direct and intermediary channels.
From tomorrow, for applications up to 80 per cent LTV, a maximum of 60 per cent LTV can be taken on interest-only but the remaining 20 per cent must be taken on capital and interest basis.
For applications over 80 per cent LTV, borrowers must take out the loan on a capital and interest basis only.
Any outstanding interest-only applications up to 75 per cent LTV can be submitted until close of business tonight, with the new rules taking effect from tomorrow morning.
The lender has not made any changes to its acceptable repayment vehicles.
Last week, Money Marketing revealed Santander had further tightened its interest-only criteria and will no longer accept pensions, the sale of a second property, bonuses or cash savings as repayment vehicles and revealed that NatWest Intermediary Solutions had temporarily suspend lending through brokers.
Last week, both Nationwide Building Society and Coventry Building Society’s decided to cut their maximum LTV for interest-only lending from 75 per cent to 50 per cent. In February, Santander decided to cut its maximum LTV on interest-only to 50 per cent from in February.