A customer who needs an extension on their payment break could be “struggling”, the lender’s boss Joe Garner (pictured) said.
Lenders were obliged from March to offer three-month mortgage holidays to any borrower affected by the coronavirus.
Customers were guaranteed the break would not negatively impact their credit rating.
The government and regulators have now announced plans to extend the initiative by a further three months, however trade bodies and other lenders have argued that further extensions would not help borrowers or the economy.
Garner said those who needed the additional break should have it noted on their credit file.
He said this need not be a “big black mark” but more “a middle way” that would alert lenders, but still mean people are able to remortgage.
Further loans not in borrower’s interest
Around 280,000 Nationwide members have taken a payment break, mostly from mortgages.
Talking on the BBC’s Today programme, Garner said: “Probably the very first people to apply would be those who are really on top of their financial position and we know there are a lot of people who have taken them as a precaution, and will go back to paying in full at the first opportunity.”
“If someone is struggling, and if there is no sign on their credit rating, they could go out and take further and further loans, which would not be in their interest,” he added.
It comes as Nationwide revealed a sharp drop in profits and set aside £101m to deal with the financial fallout from the coronavirus.
Trade body UK Finance has estimated between 60 and 70 per cent of those on mortgage holidays could afford to resume full payments when the break ends.
It has not yet been decided whether further mortgage repayment breaks will be marked on credit files.
However, lenders can see whether a holiday has been taken without it being negatively marked on credit history.
Some brokers have already expressed concerns lenders will use payment breaks to assess future borrowing for applicants.