Nationwide remortgage deal offers 6.5 times borrowers’ income
The mutual has raised its Loan to Income (LTI) multiple used to calculate the maximum mortgage it can offer from 4.49 times to 6.5 times.
This means people can borrow six and a half times their income when taking out a like-for-like remortgage with Nationwide.
It’s available up to 90% Loan to Value (LTV) and is aimed at applicants looking to remortgage to get a better rate or switch from a variable rate to a fixed option, without taking any additional borrowing.
Nationwide said it is also likely to help mortgage prisoners who, despite having a clean payment history, are unable to remortgage due to current affordability criteria.
Applicants will still be subject to Nationwide’s affordability assessment to ensure it lends responsibly. The mutual reduced the stress rate on like-for-like remortgages in 2020 to put it 1% above its standard mortgage rate (SMR) instead of 3% higher. The SMR is currently 3.99%.
Henry Jordan , director of mortgages at Nationwide Building Society, said the ability to get a better rate on a mortgage was increasingly important given the current squeeze on household finances.
He said: “The ability to borrow enough can be a barrier when people look to remortgage, even when they can demonstrate a clean payment history.
“The remortgage market continues to remain strong as people look to try and counter the rising cost of living by securing a better rate on their mortgage or fixing their mortgage payments. By increasing the maximum LTI, we are giving people who don’t need any additional borrowing more opportunity to change lender and save money, and potentially helping mortgage prisoners who have been unable to remortgage to a better deal until now.”
David Hollingworth, associate director at London and Country Mortgages, said: “This move should help give borrowers confidence that they can shop around, despite facing the current financially uncertain backdrop.
“Those borrowing on a like-for-like basis will have a clear track record of meeting their payments and will feel that they should be able to take advantage of better deals by switching lender. It’s therefore good to see lenders thinking about how they can provide more flexible solutions for the right target groups.”
The remortgage deal is available direct through Nationwide and via brokers.