NatWest and RBS are to reintroduce interest-only mortgages for the first time in almost three years – but only for people who earn at least £100,000.

The loans will also only be available if customers take a maximum LTV of 75%, with further restrictions if the customer intends to sell their home to repay the loan.

The banks also said the mortgages would be offered only on the condition that the applicant had “an acceptable repayment strategy, such as savings or a pension plan, to make sure they are able to repay the capital at the end of the term”.

A spokesman for NatWest Intermediary Solutions told EYE: “Having undertaken a thorough review of the market, we now believe it is appropriate to offer our customers, who meet certain criteria, to take out interest-only mortgages to purchase their residential properties.”

The banks’ previous interest-only loans, which were scrapped in December 2012, had been available to customers who banked with RBS/NatWest for a minimum of three months and who earned a minimum £50,000 annual salary.

The news comes just a week after Citizens Advice estimated that almost one million people with interest-only mortgages have no plan on how to repay the debt when their terms ends.

NatWest and RBS said they would write to customers “a number of times” throughout the life of the mortgage to ensure they were on track with their repayment strategy.

The banks added that the mortgages would not be available to customers if they planned to repay within three years, if they intended to use the mortgage to consolidate debt, if they were applying through a Help to Buy or shared equity scheme, or if they lived outside the UK or had no right to reside in the UK.

Lloyd Cochrane, head of mortgages and protection for RBS and NatWest, said: “Interest-only mortgages will give our customers more choice and provide additional flexibility in how they repay their mortgage.

“We are re-entering this market due to customer demand and we will keep in touch with our customers to support them to stay on track with repaying their mortgage.”

 Graham Felstead, head of NatWest Intermediary Solutions, said: “We are delighted to be reintroducing residential interest only mortgages for brokers and their customers.

“Having undertaken a thorough review of the market, we believe we can help many customers, who meet specific conditions, with their home ownership needs with interest-only mortgages.

“Customers who take this option will need to have approved repayment strategies in place and agree to engage with us during the loan period so that we can support them to stay on track to repay the loan.

“The mortgage market is currently a very dynamic one which is set to continue on its growth path.

“We have enjoyed great support from the broker market this year and look forward to continuing to help more and more customers with their borrowing needs for the rest of 2015 and beyond.”