RBS tightens home loans, following Lloyds example

[LONDON] Royal Bank of Scotland (RBS) has followed rival Lloyds Banking Group in placing restrictions on mortgage lending to tackle rising British house prices.

RBS, which is 81 per cent owned by the British government, will introduce a four times loan-to- income cap and maximum term of 30 years for all mortgages worth £500,000 (S$1.05 million) or more, according to sources familiar with the matter.

The move is designed to be an extra safeguard on top of the affordability checks RBS already has in place.