Nationwide announces new rule for customers ‘from today’ | Personal Finance | Finance
Nationwide has made changes (Image: John Keeble, Getty Images)
More people can now borrow up to six times their income, as Nationwide has lowered the eligible income required for joint applicants from £100,000 to £75,000, a move welcomed by brokers.
As of today, new borrowers with Nationwide can borrow up to six times their income, where they are a home mover or remortgaging with additional borrowing, and have an eligible income of £75,000 or more for both sole and joint applicants. Meanwhile, existing Nationwide customers could borrow up to six times their income, where they are moving home, porting or borrowing more, and there’s no minimum income level.
Stephen Perkins, managing director of Yellow Brick Mortgages, said: “Nationwide lowering the income threshold to access its higher borrowing limits is good news for many borrowers looking to move home or remortgage with additional borrowing, particularly those who may previously have fallen just short of qualifying.
“Changes like this are a reminder that mortgage affordability isn’t static. Lenders regularly adjust their criteria, meaning the amount someone can borrow can change even when their own circumstances haven’t.
“However, borrowing more isn’t automatically the right answer, and borrowers should still choose a mortgage that leaves room in their budget if circumstances change. That said, increasing consumer choice within the mainstream market should be welcomed, particularly where it helps financially responsible households buy a home that better suits their long-term needs.”
Brokers have reacted (Image: Joe Morris via Getty Images)
Emma Jones, managing director of Runcorn-based Whenthebanksaysno.co.uk, also welcomed the change: “This is a positive move from Nationwide and one that will be welcomed by many borrowers who have previously found themselves just short of the borrowing they need. The focus isn’t on encouraging people to overstretch themselves, but on recognising that many households with stable incomes have been unfairly restricted by affordability models despite demonstrating they can comfortably manage their finances. Well done, Nationwide.”
Harry Goodliffe, director of HTG Mortgages, described the change as “refreshing at a time when lenders are busy increasing rates”.
He continued: “Expanding access to six times income will help more buyers and movers get the borrowing they need, particularly in expensive parts of the country. It’s a positive step, but it also highlights a bigger problem: house prices have raced so far ahead of earnings that lenders are having to stretch income multiples just to keep homeownership within reach.”
Justin Moy, managing director at EHF Mortgages, described the move as “a helpful tweak of criteria for those looking to borrow a little more than normal, bringing Nationwide in line with a number of lenders who offer similar opportunities”.
He added: “As always, this is subject to a normal affordability assessment, so those saddled with large commitments will see their mortgage opportunity reduced to below 6x income. But with care, it’s a good move.”
Richard Davidson, mortgage advisor at onlinemortgageadvisor.co.uk, said he had advised many borrowers for whom this new criteria tweak would be a benefit: “Lowering the qualifying income for six times lending from £100,000 to £75,000 should open the door for a good number of home movers and remortgage customers who were previously boxed out. I’ve sat across from plenty of couples in that income bracket who simply couldn’t stretch to the property they needed under the old rules.”
Samuel Mather-Holgate, managing director of Mather and Murray Financial, added: “This is genuinely good news for borrowers who have been trapped by the affordability squeeze. Dropping the joint income threshold from £100,000 to £75,000 opens the six-times-income door to far more mainstream households, not just higher earners.
“For home movers, it could be the difference between staying stuck and getting the space they need; for remortgagers raising extra funds, it adds useful breathing room. The big caveat is that this is not a licence to borrow recklessly.
“Six times income is a serious commitment, and rates, bills and job security still matter. But with house prices still painfully out of reach for many families, widening access to higher income multiples is a welcome, practical move that recognises the reality of today’s market.”
