Yorkshire BS amends its interest-only mortgage criteria.

Changes to Yorkshire Building Society's interest-only mortgage criteria have been announced. The lender has said that it is introducing further restrictions to its interest-only products.

Criteria has been tightened on the acceptability of the sale of property as an adequate repayment vehicle.

For those planning to use the sale of property to repay the capital owed, Yorkshire BS has changed its loan to value levels.

Interest-only mortgage-holders with property sale as their repayment plan will no longer be approved for a 75% LTV mortgage. The lender advises that the maximum it will advance will be 50% on property which has been valued at more than £250,000. To be approved for a deal applicants must agree to make a minimum of one annual over payment.

Not all 75% LTV interest-only deals will be withdrawn. Yorkshire BS has said that it will continue to offer deals at a 25% deposit level for other types of repayment vehicle, providing an adequate repayment vehicle can be proved.

Acceptable repayment vehicles include ISAs and existing endowments if the medium projection figure is sufficient to cover the loan. Stock, shares, investment bonds and pensions also remain acceptable.

The Yorkshire's interest only mortgage criteria change also applies to Chelsea Building Society, Accord Mortgages and Barnsley Building Society.

The lender says it understands the benefit to borrowers and therefore wants to continue offering interest-only mortgages, however it says to do so it must correctly manage any risk.

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