The mutual launched 95% LTV deals in March 2011 but it has now temporarily withdrawn them due to unexpected demand.
Currently Skipton offers two 95% LTV products, a 3-year and 5-year fixed rate mortgage.
Skipton is also lowering its maximum LTV cap on interest-only products from 75% to 60%, effective from close of business tonight.
A spokeswoman at Skipton said: “We have seen an uptick in applications for our 95% LTV mortgages since the start of this year and as a result they have become over-subscribed. Therefore, we have decided to temporarily withdraw from offering them in order to re-assess our position.
“As a prudent mutual business, we must carefully balance doing our bit to help struggling borrowers and protecting the society by ensuring an appropriate LTV and risk balance across our mortgage portfolio.
“We continually review our mortgage product range in light of changing market conditions and intend to return to the high LTV space at such time that we judge that it is appropriate to do so. We have been punching above our weight in lending, in line with our mutual commitment to enabling homeownership.”
Skipton said that the move of the LTV limit on interest-only mortgages from 75% to 60% was a precautionary step in reflection of changing market sentiment towards such loans.
The spokeswoman said: “We believe that interest-only mortgages will continue to have a place in the market, for certain types of borrowers who have appropriate vehicles in place to eventually repay their loan.
“We have always exercised prudence around interest-only lending, with a maximum LTV limit of 75% when some other providers were offering them up to 100% – as well as strict criteria regarding the types of repayment vehicles we will accept when underwriting applications for such loans.
“We will continue to monitor market conditions and may increase our LTV limits again in the future if this proves appropriate.”
