ING Direct slashes max interest-only LTV to 50%
ING Direct has become the latest lender to cut its maximum Loan to Value (LTV) on interest-only lending from 75% to 50%.
The lender said that borrowers can top up their borrowing to 80% LTV as long as the remaining 30% is on a capital repayment basis.
Where the repayment vehicle is the sale of the property, ING said it will insist on a minimum of £165,000 equity in the property.
It added that acceptable repayment plans include endowment or pension plans where the provider’s mid-point projected value is sufficient to repay the interest only element.
Other acceptable repayment vehicles include unit Trusts, PEPs, stocks and shares ISAs or professionally managed share portfolios where the current value is sufficient to repay the interest-only element.
The repayment plans are only acceptable where they have been in place for at least three months prior to the date of application.
Other lenders that have pulled back on interest-only criteria include Santander, Leeds, Coventry Building Society and most recently, Principality Building Society.