The product, which is also known as joint borrower sole proprietor (JBSP), aims to “boost the amount a customer” can borrow, as the borrower’s income and the income of a family member or friend are used for affordability.
As an example, a first-time buyer with a £28,000 salary and 10% deposit can borrow up to £124,250 on the lender’s existing products. This means they can afford a property of up to £138,000.
With the Family-Backed mortgage, if a borrower’s salary were combined with a family member or friend’s salary of £45,000, this would increase the borrowing potential to around £246,000, upping the property budget to £273,000.
NatWest said the family member or friend would be required to secure independent legal advice before entering into the agreement.
The bank added that it had also changed its affordability stress rates for all mortgage customers “in a further boost to prospective buyers”.
Welcome to the future: how collaboration is driving the shift to digital home buying
Sponsored by Halifax Intermediaries
NatWest said it wanted to “ensure customers have confidence that they can afford their mortgage over the long term”.
It said the changes to the stress rates mean a typical family can borrow up to £33,000 more, but the stress rates would still “guard against future interest rate rises”.
NatWest is the latest high street lender to revise its stress rates to boost borrowing power, with HSBC and Lloyds Banking Group having made similar moves earlier this month.
Barry Connolly, managing director of home buying at NatWest, said: “We are committed to providing more pathways to homeownership and helping first-time buyers to achieve their goals.
“Today’s launch of the ‘Family-Backed’ mortgage boosts the borrowing power of prospective homeowners by enabling them to combine incomes with a family member or friend, while retaining independence to own a home in their own name.”
He continued: “In addition, we also announce that we have revised our affordability rates for mortgage customers, boosting the borrowing potential of hundreds of thousands of potential homeowners, whilst continuing to ensure that they can afford their mortgage over the long term.
“We believe that this twin announcement can help instil hope amongst our customers that their dreams can be realised.”
