Abbey slashes interest-only LTV

Abbey has reduced the maximum loan available for borrowers with a ‘suitable repayment vehicle’ in place to 75%, previously 85%. Those without a repayment vehicle will need to stump up a 50% deposit. Many borrowers have used interest-only loans to afford high house prices as they would not need to repay the capital portion of the loan and could benefit from any gain in house prices. However, a growing number of reports suggesting house prices may begin to fall means these loans are more risky for lenders. The move is the latest in a string of price rises and restricted lending criteria fr...