NatWest launches new rates, a 'Family Mortgage' JBSP scheme and improved affordability rules allowing families to borrow up to £33,000 more
It has been a busy morning at NatWest for Intermediaries with the bank announcing a host of cheaper mortgages, a new guarantor affordability scheme, and larger loan sizes.
NatWest has launched the 'Family-Backed' mortgage deal, which enables eligible customers to apply for a mortgage with the support of a family member or friend. The bank has also revised its affordability stress test for all mortgage customers.
The "Family-Backed" product, which is also known as joint borrower sole proprietor (JBSP), aims to “boost the amount a customer” can borrow, as the borrower’s income and the income of a family member or friend are used for affordability.
How much can applicants borrow with NatWest's 'Family-Backed' mortgage?
As an example, a first-time buyer with a £28,000 salary and 10% deposit can borrow up to £124,250 on the lender’s existing products. This means they can afford a property of up to £138,000.
With the Family-Backed mortgage, if a borrower’s salary were combined with a family member or friend’s salary of £45,000, this would increase the borrowing potential to around £246,000, upping the property budget to £273,000.
NatWest stated that the family member or friend would be required to obtain independent legal advice before entering into the agreement. This is because they will not be able to borrow as much as they want to take out a mortgage.
NatWest eases affordability rules so a typical family can borrow £33,000 more
The bank added that it had also changed its affordability stress rates for all mortgage customers “in a further boost to prospective buyers”.
It said the changes to the stress rates mean a typical family can borrow up to £33,000 more, but the stress rates would still “guard against future interest rate rises”. NatWest is the latest high street lender to revise its stress rates to boost borrowing power, with HSBC, Santander, and Halifax having made similar moves earlier this month.
NatWest said it wanted to “ensure customers have confidence that they can afford their mortgage over the long term”. This is in response to the FCA’s call last month for lenders to design their affordability rates to best meet their customers’ needs, in a market where interest rates are declining.
Aaron Strutt, product director at Trinity Financial, says: "Many lenders now offer Joint Borrower Sole Proprietor, but not all of them allow a friend to be added to the application."
Call Trinity Financial on 020 7016 0790 to secure a mortgage, book a consultation, or complete our mortgage questionnaire.
The information contained within was correct at the time of publication but is subject to change.
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