Interest-only mortgage rates criteria tightened again by Santander.

Santander has again tightened its interest-only mortgage rates lending criteria.

Santander has announced that from the end of March, it will no longer accept second property sales, cash savings, pensions or bonuses as suitable repayment vehicles.

The latest move comes into effect only a month after the announcement of a reduction to its maximum LTV level for interest-only lending, which is now 50 per cent.

The interest-only mortgage rates criteria change will not affect Santander's existing mortgage borrowers and will apply to both its direct and intermediary broker channels

Santander advise that they will accept only the sale of the main property or investments such as stocks and shares, endowments, investment bonds, unit trusts or Isas as repayment vehicles.

The lender says it will not consider projections for future growth for proposed investment vehicles and advises they must be equal to the value of the capital to be re-paid. Santander also plan to apply a buffer of £100,000 between the present property valuation and the loan required.

A Santander spokesperson advised that they constantly review their mortgage lending policy to make sure that they lend responsibly. Santander believe their recent changes are both prudent and in line with other lenders recent interest only mortgage rates changes.

Competitive interest only deals are still available despite criteria being tightened. Lenders such as Virgin Money, who took over Northern Rock earlier in the year and Leeds both offer great rates through Deal Direct.

Contact Deal Direct's skilled brokers for competitive mortgage rates and independent mortgage advice.