It raises maximum LTI and loan sizes, and also reduces rates
Nationwide Building Society is offering a major boost to first-time buyers by allowing loans up to six times income, a move aimed at addressing affordability challenges.
Effective from tomorrow, September 24, the major lender will extend its maximum loan-to-Income (LTI) ratio through its Helping Hand mortgage scheme.
Helping Hand enables first-time buyers to borrow up to 95% loan-to-value (LTV) on five- or ten-year fixed rate mortgages. Nationwide’s increase to six times income offers a 33% uplift compared to its standard lending limit of 4.5 times income.
Introduced in 2021, Nationwide’s Helping Hand has proven especially popular in regions with higher property prices, such as the Outer South East and London, where the average first-time buyer property costs £262,504 and £452,797, respectively.
Nationwide – one of the UK’s largest mortgage lenders – has lent more than £7.5 billion through Helping Hand since its inception, supporting around 40,000 first-time buyers. The scheme will continue to be available to those earning a minimum of £30,000 as sole applicants or £50,000 jointly, with all applications subject to affordability and credit checks.
In addition to the LTI increase, the lender announced that it would reduce mortgage rates for first-time buyers by up to 31 basis points, making it the first major lender to offer sub-5% rates for those with a 5% deposit.
Reductions for first-time buyers include a five-year fixed rate at 95% LTV with a £999 fee, now at 4.99%, a 10-year fixed rate at 75% LTV with no fee at 4.69%, and a five-year fixed rate at 90% LTV with a £999 fee, reduced to 4.49%.
New customers moving home will see cuts such as a five-year fixed rate at 60% LTV with a £1,499 fee at 3.74%, and a two-year fixed rate at 90% LTV with a £999 fee at 5.04%. Existing customers moving home benefit from similar reductions, including a five-year fixed rate at 60% LTV with a £1,499 fee at 3.74%, and a five-year fixed rate at 95% LTV with no fee at 5.04%.
Remortgage deals include a two-year fixed rate at 85% LTV with a £999 fee reduced to 4.99%, and a five-year fixed rate at 95% LTV with no fee now at 5.54%. Switcher rates are also being cut by up to 0.26%, with rates starting from 3.79%.
Nationwide will also increase its maximum loan sizes for those borrowing above 90% LTV, from £500,000 to £750,000. This follows UK Finance data showing that 5% of house purchase loans were over £500,000 in the six months to June 2024, rising to 22% in London.
“Helping Hand has supported around 40,000 people onto the property ladder since we launched it three years ago,” said Debbie Crosbie, chief executive of Nationwide Building Society. “We want to do more and are boosting the scheme to six times income and increasing the maximum loan size.
“This, alongside our most recent rate cuts, further strengthens our market-leading position and demonstrates that, as one of the UK’s largest lenders, Nationwide continues to put first-time buyers first.”
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