Coventry Building Society withdraws interest-only mortgages
The mutual has taken the decision to withdraw from the market for residential deals, but will continue to offer interest-only buy-to-let products.
Colin Franklin, sales and marketing director at Coventry Building Society, said that the decision had been made due to a decrease in new interest-only applications.
“Residential interest-only mortgages have declined to less than 2% of all residential mortgage applications.
“We have therefore decided the time is right to leave this market.”
The lender said that existing borrowers on interest-only will not be able to increase their borrowing on an interest-only basis, but the option to port their existing mortgage will remain in place.
Coventry’s decision follows the withdrawal of NatWest and RBS from the interest-only market earlier this week. Fellow mutual Nationwide stopped accepting new interest-only applications in October.
However, Abbey for Intermediaries announced a relaxation of its interest-only policies last week with the launch of a part-interest-only, part-repayment mortgage.