The lender said that the market had ‘reduced considerably in recent months’ and that it would cease offering the product to new borrowers from 8pm on Sunday.

Accord, the intermediary brand of the Yorkshire Building Society, said it would still allow interest-only lending on its buy-to-let range.

Any existing customers wishing to port their mortgage or increase their borrowing will need to take any additional borrowing on a capital and interest basis.

The move will affect all brands within the Yorkshire Building Society Group. These include Chelsea, Barnsley and Norwich & Peterborough building societies.

This move follows a spate of withdrawals from the interest-only space at the end of 2012. Nationwide stopped accepting new interest-only applications in October and was followed by other major lenders including NatWest, RBS, Coventry Building Society and Newcastle Building Society.

A statement from the lender said: “The Yorkshire Building Society Group will stop interest-only lending to new customers, excluding buy-to-let, from 25 March 2013.

“We regularly review our mortgage proposition and the interest only market has reduced considerably in recent months.

“Interest-only mortgages will continue to be available for buy-to-let only from Accord Mortgages, the intermediary lending subsidiary of Yorkshire Building Society.”