The Nationwide has said that it will be offering a considerable increase on the amount that first-time buyers can borrow. Starting from today, borrowers will be able to request a mortgage up to six times their income with just a 5% deposit. However, this will only be available to those who are taking out a 5 or 10-year fixed-rate package. This comes as lenders have tried to entice first-time buyers with the best deals, instead of those who are remortgaging.
This new boost from The Nationwide follows a report from the Building Societies Association (BSA), which stated that first-time buyers are facing the toughest conditions in 70 years to buy a home. The BSA called for “fresh thinking” in the market, including a lessening of the limits of lending for those with only a small deposit to offer.
The Nationwide has become a key player in this battle of lenders, offering some of the largest so-called income multiple loans available. While first-time buyers are typically allowed to only borrow up to 4.5 times their income for a mortgage, The Nationwide has already allowed some buyers to borrow 5.5 times that amount. However, with the introduction of this new proposal, it is expected that borrowing will increase, particularly in the more affluent parts of London and the southeast of England.
Although these rates will sound attractive, borrowers will still be subjected to affordability checks and strict affordability criteria, before being allowed to take out such a mortgage. Experts say that such deals are only typically available to high-earning individuals, although some smaller lenders have offered loans up to six times salary for those willing to pay the additional costs in interest
Read the full article from The BBC here: Read More
