It will replace its income multiplier with a new calculation which will vary from case to case depending on the client’s circumstances.
The system will use a calculation which will look at disposable income, changes to income, household costs.
Borrowers will be able to overpay and subsequently underpay, as well as extend the mortgage term to reduce payments.
A spokesperson for Nationwide, said: “The way we used to assess affordability always took into account a customer’s incomings and outgoings. We had a more sophisticated approach than using a simple income multiplier. Our changes simply reflect an even more personalised approach to affordability, making it increasingly specific to the individual.”
She added: “Nationwide is not anticipating any overall increase or reduction in its lending as a result of using this new approach and we anticipate that the vast majority of applicants will continue to be accepted.”
