Nationwide restrict access to interest only mortgage deals.
Nationwide have brought in an interest only mortgage criteria change meaning that mortgage borrowers will now need a minimum 50 per cent deposit to be approved for a deal.
Nationwide's interest only mortgage criteria change may not just affect new mortgage customers but could also affect those existing mortgage holders who are planning to move and who may need to increase their mortgage.
Nationwide previously required a smaller 25 per cent deposit which was a limit introduced less than a year ago. Prior to this time the Nationwide, like all other mortgage lenders approved interest only deals with a deposit as low as 5 per cent.
Those with small deposits will now be directed by the lender to repayment mortgage products.
Interest-only mortgages have experienced many changes in recent months, as mortgage providers have tighten their lending criteria due to pressure from regulators who are attempting to ensure that mortgage borrowers are able to repay their capital debt.
The FSA have demanded that banks and building societies obtain solid proof of a credible saving or investment plan to clear the capital owed at the end of the interest only mortgage deal. The regulator wants a check to be performed at least once during the term of the loan to see how proposed investments are performing.
Any Nationwide interest only mortgage holder looking to switch deals to a repayment option, should contact Deal Direct for the most competitive mortgage rates currently available.
