Lenders continue to tighten criteria

Abbey and Nationwide are two of the latest lenders to make alterations to their mortgage ranges as the credit crunch continues to bite.

Nationwide has revealed a maximum loan size of £500,000 for new customers and a maximum loan to value of 90% on fixed and tracker rate mortgages for new loans.

New mortgages on the society’s base mortgage rate will only be available to customers dealing directly with Nationwide and only up to a maximum loan to value of 75%. Existing Nationwide borrowers will not be affected by these changes and will continue to have access to all products up to 95% loan to value (LTV).

Matthew Carter, Nationwide's divisional director for mortgages, said: "These changes will allow us to maintain control of the volume of business the society is attracting, while enabling us to continue offering our full range of mortgages to our existing members in a controlled and prudent way."

As of today (29 April), to get an interest-only product from Abbey, borrowers need to demonstrate they have a repayment vehicle in place to get up to 75% LTV.

If they can't, they can only access up to 50% LTV. However, up to 90% LTV is available on a part-and-part basis, with up to 75% interest-only (if evidence of a repayment vehicle is in place) and the rest as repayment.

Abbey spokesperson David Stewart said: "In the current market conditions, it is prudent for us to be doing this to reduce the risk for us and for the consumer."

Louise Cuming, head of mortgages at moneysupermarket.com, said: "Despite the Bank of England shoring up the mortgage market with an injection of £50bn, these announcements from Abbey and Nationwide show there is no limit to the amount of bad tidings homeowners can receive."