Nationwide said interest-only lending will be extended to all buyer types up to 75% loan to value (LTV) and up to 85% LTV for part and part deals.
Repayment options have also been widened to include UK-based savings, investments, pension funds and other properties. Previously, the accepted repayment option was the existing sale of a main residence.
The minimum eligible income stands at £75,000 for sole applicants and £100,000 for joint cases, unless one applicant earns at least £75,000.
The maximum loan size comes to £5m and the maximum term has been upped to 40 years or retirement if sooner. The maximum term was previously 25 years.
The interest-only range has also been widened to first-time buyers.
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Carlo Pileggi, Nationwide’s head of mortgage products, said: “We are delighted to be able to expand and enhance our interest-only offering. Interest-only can be a great option for customers who have a suitable repayment vehicle and want the flexibility provided by lower monthly payments.
“These changes, along with robust criteria, mean we will be able to increase the support we can provide borrowers looking for more flexibility, while ensuring Nationwide continues to lend responsibly. As the country’s second-largest lender, it is natural that we continue to look at the products we offer, including those we make available through brokers, to ensure we can help them meet as many of their clients’ needs as possible.”
Andrew Montlake, CEO of Coreco Mortgage Brokers, said: “Nationwide’s move is a real vote of confidence in the broker channel and gives advisers more tools to deliver genuine flexibility within robust safeguards.
“Opening interest-only to first-time buyers, while maintaining clear income thresholds of £75,000 sole or £100,000 joint, and keeping the proposition exclusively available via intermediaries, means customers will access the professional advice that is crucial, especially in the initial stages of their home buying journey.
“These are thoughtful, positive changes that support brokers and broaden choice for borrowers in a responsible way.”
