Nationwide Building Society enhanced its 'Helping Hand' mortgage products to allow first-time buyers to secure a mortgage loan up to six times their income from September 2024. The larger loan-to-income ratio means that homebuyers could secure a 33% larger mortgage loan compared to the average ratio of 4.5 times income. This borrowing ability could make a significant difference to those struggling to get onto the housing ladder.
About Nationwide’s increased loan-to-income ratio
Nationwide was already amongst the most generous lenders based on the loan-to-income (LTI) ratios it offered first-time mortgage borrowers, however, the recent enhancement will now take its highest loan-to-income ratio from 5.5 times income to 6 times income. Based on a household income of £50,000 this will mean that you can now borrow a mortgage loan of £300,000 instead of £275,000 giving you an extra £25,000 towards your home purchase. We regularly update the mortgage lenders who offer high-income multiples in our article, “How much can I borrow on my mortgage?”.
Partner SpotlightSpecialist mortgage advice for first-time buyers
Our partner Tembo is a specialist mortgage broker that offers tailor-made mortgage solutions for people with smaller deposits including Guarantor, LTV and first-time buyer schemes.
Who can qualify for a six-times-income mortgage with Nationwide?
In addition to increasing the amount that first-time buyers can borrow, Nationwide has also lowered the minimum income levels to qualify for a 6-times-salary mortgage loan. Previously, Nationwide borrowers would have to earn at least £100,000 annually to qualify for a mortgage loan that was 5.5 times their earnings. However, the revised criteria for a 6-times-salary mortgage loan means applicants can qualify with earnings from £30,000 individually or £50,000 jointly. The change to qualifying incomes will mean that many more households can take advantage of the increased lending option.
The LTI ratio is not the only aspect of the Helping Hand mortgages that Nationwide has improved for first-time buyers. It has also increased the maximum loan-to-value (LTV) from 90% to 95% meaning that you can secure the higher LTI ratio with just 5% of the property purchase price towards the deposit. Nationwide does not offer mortgage loans at LTVs over 85% for some home purchase types so you will have to check if your property purchase qualifies.
You can apply directly to Nationwide or through a mortgage intermediary*, who can help you compare Nationwide's deal with other lenders before you make your decision.
Qualifying criteria for Nationwide's 6-times-income mortgage loan
- All applicants must be first-time home buyers
- Maximum loan to value of 95% - minimum deposit 5%
- Minimum earnings for single applicants - £30,000
- Minimum combined earnings for joint applicants - £50,000
- Employed income only - self-employed income does not qualify
- Mortgages must be arranged on a 5 or 10-year fixed-rate basis
What are Nationwide's first-time buyer rates?
The first-time buyer mortgage rate for a 5-year fixed rate deal (with no product fee) has fallen from 4.74% to 4.44% for a mortgage LTV of between 85% and 90%. The interest rate charged on the same mortgage deal but on a 95% LTV has reduced from 5.09% to 5.04%. You can find the best mortgage rates for your specific needs based on varying LTVs, types of mortgage and deal periods in our regularly updated article, "Best mortgage rates in the UK". You can also use our mortgage rate comparison tool to search over 90 lenders' mortgage deals for the best mortgage interest rates and overall costs.
Securing the mortgage you need
Buying your ideal home in your desired location could fall outside your reach even if you have worked hard to save a reasonable deposit for your home purchase. Many aspiring homeowners end up struggling to secure the mortgage loan they need because they are limited by the loan-to-income ratios offered by lenders. It can be even tougher when you consider additional affordability tests and credit checks that need to be passed. Frustratingly, loan-to-income ratios are not always published by lenders, so it helps to get the advice and guidance of a mortgage broker who has this knowledge. Additionally, a mortgage broker can make you aware of the relevant mortgage schemes and products that are available, helping you to borrow more and spend less.
If you do not have a mortgage broker, you can find one that suits your needs in your local area by searching the online professional directory, Vouchedfor*. It allows you to find mortgage professionals and even see how other customers found the service that they provide. Alternatively, first-time buyers may wish to contact an online mortgage broker that does not charge a fee for its services. Habito* can provide online and over-the-phone advice and support to arrange your mortgage completely free of charge.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Habito, Vouchedfor, Tembo Money
