Nationwide lowers deposit required to qualify for its interest-only and foreign national mortgages
Nationwide for Intermediaries has made two changes to its mortgage rules as it looks to lend more money and bring its acceptance criteria more in line with some of its competitors.
Nationwide currently provides some of the most competitively priced rates, especially for borrowers seeking £300,000+ mortgages, and it also provides some of the most generous income multiples.
Interest only: Nationwide has increased the maximum loan-to-value available for customers requiring new interest-only mortgage lending, so they need a 25% deposit to qualify rather than a 40% deposit.
Most of the bigger lenders provide interest only, and there is a lot of competition in this part of the market.
Foreign nationals: At the same time, Foreign Nationals without Indefinite Leave to Remain in the UK can now borrow, provided they have a 15% deposit (they previously needed a 25% deposit).
Foreign national applicants with less than a 25% deposit will be subject to minimum income requirements of £50,000 per annum for sole applicants or £75,000 for joint applicants.
Nationwide is also removing the requirement for these borrowers to provide at least 25% of the total deposit from their resources. This change applies regardless of the size of their deposit.
What is Nationwide's interest-only mortgage criteria?
The following eligibility criteria will apply for Nationwide's interest-only new purchases, remortgages and part and part lending:
- Minimum income criteria of £75,000 for sole applicants and £100,000 for joint applicants.
- Minimum equity varies by region. Nationwide will base this on the region where the property is situated. Minimum equity levels:
- a. £300,000 for Greater London/Outer Metropolitan
- b. £250,000 for Outer South East
- c. £200,000 for all other UK regions
- Maximum term of 25 years (or retirement if sooner)
- Sale of main residence as a repayment strategy.
- Maximum loan amount of £5 million.
- First-time buyers are not eligible for interest-only purchase applications.
- Interest only isn't available where the security isn't the main residence e.g. it's not acceptable for an applicant to remortgage a holiday home.
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The information contained within was correct at the time of publication but is subject to change.
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