Nationwide returns to low deposit lending on longer mortgage term
Nationwide revealed it was continuing to expand its higher LTV lending so prospective homeowners could look to buy property with smaller deposits.
When reintroducing its 90% LTV deals last summer, Nationwide tightened criteria including temporarily restricting the maximum loan term to 25 years.
Lending at all other tiers remained at a maximum term of 40 years throughout the pandemic.
Analysis from the mutual’s house price index affordability report showed that in 2020, around 70% of first-time buyers took out a mortgage with an initial term of over 25 years, up from 45% in 2010.
Nationwide Building Society director of mortgages, Henry Jordan, said: “As a responsible lender we initially made a cautious re-entry back into the higher LTV market.
“However, as we become more comfortable lending in the current market, we are now in a position to revert to offering 90% LTV mortgages available with a maximum term of 40 years.
“We know that many borrowers, particularly first-time buyers, will opt for a longer term mortgage in order to help make their monthly mortgage repayments more manageable.”
The mutual also revealed it has halved application to offer time to 15 working days for standard cases from its situation at the start of December.
Nationwide said it was still receiving a high level of applications as borrowers look to take advantage of the stamp duty holiday noting it had added additional resource to its teams to help process as many cases as possible by the deadline.
Jordan said: “The changes we made at the end of last year continue to have a positive impact on our service levels with the time from application to offer halving in recent weeks.
“However, with the stamp duty holiday ending in March, we are likely to enter a peak period.
“We are grateful to all brokers who continue to submit new cases while, at the same time, managing their clients’ expectations on the likelihood of their application completing before the deadline.”