Another lender closes its doors to Interest Only

RBS had stopped non-advised customers taking out interest-only policies in October, with the bank now claiming that interest-only mortgages were a ‘declining part’ of its overall mortgage book.

The lender denied last month that it would make changes to its interest-only policy, but has now taken the decision to close this type of lending to all borrowers.

It said existing customers will not be affected by the move and that both brands will continue to offer buy-to-let products on an interest only basis.

Moray McDonald, head of home lending at RBS and NatWest, commented: “Residential interest only mortgages have been a declining part of our mortgage lending, with only 4% of customers now applying on that basis.

“As a fast growing UK mortgage lender we want to focus on the products most of our customers are asking for.

“We don’t rule out offering residential interest only mortgages to niche customer groups in the future but we would do that using specialist advisers rather than our broad base of branch and telephony advisers.”

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