The Netherlands’ biggest mortgage lender Rabobank is limiting the percentage of new home loans that can be taken out as interest-only, in a move aimed at meeting the wishes of regulators.

Rabobank said it will cap the interest-only portion of new mortgages at 30%, down from the current 50%, with an absolute maximum of €150,000 from mid May.

That means the maximum property value eligible for an interest-only component will be €500,000 for both a Rabobank and Obvion mortgage.

The change, the bank says, will have little impact on first-time buyers, as fewer than 1% now opt for interest-only borrowing.

The measures mainly affect homeowners who already have an interest-only mortgage and want to move house or take out a new loan, as they will then be assessed under the new rules.

Across the Netherlands, about 45% of the total mortgage debt consists of interest-only loans.

The move follows renewed warnings from the central bank and financial services regulator AFM, which said last week that partly interest-only mortgages may pose risks both to borrowers, who could face large debts at the end of the term, and to lenders.

Other banks have not yet announced any changes. ABN Amro told the Financieele Dagblad it could not comment on future policy, while ING said it is sticking to the current 50% limit for now.

Unlike linear and and annuity based mortgages, interest only mortgages are not eligible for tax relief.