Nationwide is enhancing its interest-only mortgage offering with a series of substantial criteria changes.
Interest-only lending will be extended to all buyer types up to 75% LTV or up to 85% if it’s a part interest-only, part capital repayment application.
Nationwide, which re-entered the residential interest-only market in 2020, is also expanding repayment options beyond the existing sale of main residence, to include UK-based savings, investments, pension funds and other properties.
Applicants need a minimum eligible income1 of £75,000 for sole applications and £100,000 for joint cases, unless one applicant earns at least £75,000. The maximum loan amount available through interest-only is £5 million, with the maximum term increased to 40 years (or retirement, if sooner), from the current 25 years.
The range, which is currently only available through brokers, will also become open to first-time buyers.
Carlo Pileggi, Nationwide’s head of mortgage products, said: “We are delighted to be able to expand and enhance our interest-only offering. Interest-only can be a great option for customers who have a suitable repayment vehicle and want the flexibility provided by lower monthly payments.
“These changes, along with robust criteria, mean we will be able to increase the support we can provide borrowers looking for more flexibility, while ensuring Nationwide continues to lend responsibly. As the country’s second largest lender, it is natural that we continue to look at the products we offer, including those we make available through brokers, to ensure we can help them meet as many of their clients’ needs as possible.”
Andrew Montlake, CEO of Coreco Mortgage Brokers, commented: “Nationwide’s move is a real vote of confidence in the broker channel and gives advisers more tools to deliver genuine flexibility within robust safeguards. Opening interest-only to first-time buyers, while maintaining clear income thresholds of £75,000 sole or £100,000 joint, and keeping the proposition exclusively available via intermediaries, means customers will access the professional advice that is crucial, especially in the initial stages of their home-buying journey.
“These are thoughtful, positive changes that support brokers and broaden choice for borrowers in a responsible way.”
