Royal Bank of Scotland (RBS) has reportedly tightened the noose on the mortgage lending practices in a bid to deal with growing house prices in the UK.
The recent move by part-nationalized RBS follows rival Lloyds Banking Group announcement to curb the rising home loans in the country, as reported by Reuters.
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Sources familiar with the matter said that RBS will launch a four times loan-to-income cap and maximum term of 30 years for all mortgages worth GBP500,000 ($837,000) or more.
The 81% British government-owned lender told the publication, "We are focused on looking after the interests of our customers and ensuring that they only take on mortgage lending that they can afford."
The UK’s house prices jumped at their fastest annual pace in nearly seven years in May, rising the concerns that the property market could burst.
Earlier, Bank of England (BoE) Governor Mark Carney has warned that surging housing market is the biggest threat to Britain’s economic recovery.
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