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First-time Buyer

Nationwide relaunches low deposit mortgages for first-time buyers but with some exclusions

Paloma Kubiak
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Paloma Kubiak

Nationwide Building Society will allow first-time buyers to borrow up to 90% of their home’s value from today after withdrawing low deposit lending last month.

In June, the mutual withdrew its direct-only high loan to value lending amid house price uncertainty to protect borrowers from falling into negative equity.

Today, first-time buyers will be able to secure a mortgage with a 10% deposit.

Nationwide said: “For a short while, we were – like most lenders – limiting the amount we’d lend on our new mortgages to 85% of a property’s value.

“But we recognise that it is particularly tough for first-time buyers to raise a 15% deposit.

“So, we’re delighted to announce that, if you’re a first time buyer, we’re now able to lend you up to 90% to help you buy the house of your dreams.”

Mortgages are available from Nationwide direct or via brokers. However, they’re not available on flats and new builds (must be at least two years old) or for any applicant who is still furloughed. The maximum mortgage term is 25 years and applicants will be subject to enhanced affordability and credit score criteria.

While new builds are excluded, the lender said it will continue to lend through the Help to Buy scheme.

It has launched a range of fixed and tracker rate mortgages with different term and fee options:

  • Two-year fixed rates: 2.49% with a £999 fee; 2.74% with no fee
  • Three-year fixed rates: 2.79% with a £999 fee; 2.99% with no fee
  • Five-year fixed rates: 2.79% with a £999 fee; 2.99% with no fee
  • Two-year tracker rates: 2.59% with a £999 fee; 2.84% with no fee.

The product range for first-time buyers has no set limit on the number of loans available to borrowers.

The chancellor, Rishi Sunak confirmed a fortnight ago that the stamp duty threshold would be temporarily increased for properties worth up to £500,000, taking nine out of ten buyers this year out of paying the tax on property.