Nationwide has announced a significant change to its mortgage criteria, aiming to assist more people in purchasing homes. The building society now allows first-time buyers to borrow up to six times their salary with just a 5% deposit, a move considered a first among major lenders in the UK. This follows similar initiatives by Halifax and Lloyds, who recently introduced loans of up to 5.5 times annual household income for new buyers.
Under Nationwide’s new policy, a couple earning £50,000 jointly can now borrow £300,000, an increase of £75,000 from previous limits. Additionally, sole applicants with a minimum income of £30,000 can also benefit from these changes. The building society has raised its maximum loan size and cut mortgage rates, providing more options for prospective homeowners.
Couples with higher joint incomes and a 10% deposit can now borrow up to £750,000, a substantial increase compared to competitors. Nationwide has lowered first-time buyer rates by up to 0.31 percentage points, offering rates below 5% for those with a 5% deposit. These adjustments, part of the Helping Hand mortgage brand, are effective immediately.
These modifications align with a broader mortgage price war triggered by the Bank of England’s recent interest rate cut. Nationwide’s aim with these changes is to capture a larger share of the first-time buyer market, potentially influencing competitors to follow suit. The building society has emphasised responsible lending, conducting thorough underwriting checks for all Helping Hand applications to ensure borrowers can afford their loans.
Industry experts have praised Nationwide’s initiative, with mortgage technical manager Nicholas Mendes describing it as a “game changer for first-time buyers.” Nationwide’s CEO, Debbie Crosbie, stated that the changes are intended to support the government’s housing goals and reinforce Nationwide’s commitment to prioritising first-time buyers.
The announcement has been well-received by many in the housing market, particularly in regions with high property prices like London and the South East. The move is seen as a positive step towards addressing affordability challenges that have hindered home ownership for many. With the housing market showing increased activity, Nationwide’s updated mortgage offerings could not have come at a better time for aspiring homeowners.