The Nationwide Building Society is to reduce its maximum loan to value ratio (LTV) to 90% on nearly all of its products for new borrowers from 1st May. The exceptions are its three-year fixed rate mortgage and its three-year tracker.
And any new customers wanting to take out the group's standard variable deal, which it calls its base mortgage rate, will now need a deposit of at least 25%.
The Nationwide is not the first lender to limit lending to customers with only a 5% deposit. Lloyds TSB will only lend 95% of a property's value to people who have a current account or other products with it and apply for the loan through a branch.
The Abbey also only offers its 95% mortgages on a five-year fixed rate deal and a standard variable rate.
95% LTV mortgages are following the trend of the 100% and 125% mortgages following the credit crunch and slowly being withdrawn or becoing harder to apply for, as lenders protect their debts.
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