Homeowners who refinance their mortgages with Nationwide can qualify for larger loan amounts, totaling approximately £34,000 more.
Nationwide Building Society has announced an increase in the maximum loan amount for homeowners remortgaging with the building society. The increased borrowing limits are applicable to customers who meet enhanced affordability criteria and are taking 5- or 10-year fixed-rate mortgages [2][4].
The new maximum loan for a homeowner remortgaging to Nationwide with a 40-year term is not explicitly stated but can be inferred to be higher than the previous maximum of £314,300 for a 20-year term. Single homeowners need a minimum income of £40,000, while couples require a combined minimum income of £70,000 to qualify for the increased loan amount [2][4].
Homeowners not seeking additional borrowing can still borrow up to 6.5 times their income and up to 95% loan-to-value (LTV) on remortgage applications [2][4]. The actual amount that can be borrowed depends on individual circumstances such as income, mortgage term, and credit history [4].
This lending flexibility follows regulatory clarifications allowing lenders like Nationwide to use reduced affordability stress rates, enabling an average additional borrowing capacity of around £28,000 for all buyer types, notably remortgage customers [1].
It's important to note that the increased loan amount does not apply to existing Nationwide customers who are remortgaging [1]. Also, the increase in loan size is based on having a mortgage with 20 years remaining on the term [1].
Nationwide continues applying a robust affordability assessment to ensure responsible lending despite these increased borrowing limits [2][4]. The fixed rates available for remortgage 10-year terms currently start from around 4.49% with product fees from £0 to £999 depending on the deal chosen [5].
In addition, Nationwide has made changes to its Helping Hand scheme for first-time buyers, allowing them to buy a new-build home with just a 5% deposit and borrow up to six times their yearly income [1]. This change comes after regulatory clearance for homeowners to borrow six times their income, instead of the typical four and a half times [1].
For instance, a first-time buyer couple earning a combined £80,000 might be able to borrow up to £480,000 to put towards a new-build house, as long as they have a 5% deposit and can afford the monthly repayments [1]. Under the new calculation, a household with a total income of £50,000 could be able to borrow an extra £16,100, taking their maximum mortgage to £325,000 [1].
Lastly, Nationwide has relaxed its 'stress rates' for customers applying for a mortgage or remortgage [1]. This means that the hypothetical higher mortgage rates that Nationwide tests borrowers' finances against when they apply for a mortgage or remortgage have been reduced [1].
[1] The Guardian [2] Nationwide Building Society [3] Money Saving Expert [4] This is Money [5] Nationwide Building Society
- The increased borrowing limits for homeowners remortgaging with Nationwide Building Society can provide a financial advantage for those seeking property, allowing them to borrow up to £28,000 more on average [1].
- For business or personal finance, Nationwide Building Society offers financial advice to its customers, enabling them to borrow up to 95% loan-to-value (LTV) when remortgaging [2][4].
- Nationwide's Helping Hand scheme, designed for first-time buyers, now allows them to buy a property with a smaller deposit, borrowing up to six times their yearly income, providing an opportunity for those in need of financial assistance in the realm of property [1].
