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Nationwide ups LTV for Helping Hand mortgage to bolster FTBs

  • 10/02/2022
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Nationwide ups LTV for Helping Hand mortgage to bolster FTBs
Nationwide has increased the maximum loan to value (LTV) for its Helping Hand mortgage to 95 per cent, up from 90 per cent, which will boost affordability for first-time buyers.

The mutual brought out its Helping Hand mortgage last year, at the time saying it would provide up £1bn of lending via the scheme. It allows borrowers to borrow up to 5.5x income, whereas the limit is usually 4.5x income.

The change comes into effect from tomorrow and is available to eligible first-time buyers on both five and 10-year fixed rate terms.

Other benefits include £500 cashback and permitted overpayments of 10 per cent without incurring early repayment charges.

The lender said first-time buyers opting for Helping Hand can access their standard product range, and that it would apply a lower stress rate and higher maximum loan to income ratio where applicants opt for one of its standard five or 10-year fixed rate products.

It added that this would give a 20 per cent uplift in affordability, allowing more borrowers to purchase a property up to 95 per cent LTV.

Nationwide said that using Helping Hand, as an example, that a first-time buyer couple with a joint income of £50,000 could borrow up to £275,000, compared to £225,000 on a conventional 95 per cent LTV mortgage.

The product is not eligible for self-employed and cannot be used in conjunction with affordable home ownership schemes such as Help to Buy, Deposit Unlock, shared ownership or Right to Buy.

Henry Jordan, director of mortgages at Nationwide Building Society, said the ability to borrow a sufficient amount on a mortgage, along with saving for a deposit, were significant hurdles to home ownership.

He continued: “As a mutual, we were founded to support people into their first home and that remains at the heart of what we do. We know that raising even a 10 per cent deposit can be tough for some, which is why we are extending Helping Hand to our 95 per cent LTV range and, in doing so, helping more people get a home of their own.”

The mutual said that the house price to earnings ratio had deteriorated over the last 10 years, going from 4.4 in 2011, to 5.6 in 2021. The average house price for a first-time buyer has increased by 54 per cent over the same period to £214,638.

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