Home Property Finance & InvestmentMortgages Nationwide increases maximum Loan to Income to 6.5 on like-for-like remortgages

Nationwide increases maximum Loan to Income to 6.5 on like-for-like remortgages

by LLP Finance Reporter
22nd Aug 22 5:29 pm

The maximum Loan to Income (LTI) has increased from 4.49x to 6.5x on like-for-like remortgages which Nationwide says is in response to “the current rising cost of living”.

The lender says the change is aimed at supporting borrowers who are either looking to remortgage to get a better rate or those who are on a variable rate deal and want to fix their mortgage payments.

By increasing the maximum loan-to-income, it is also likely to benefit mortgage prisoners who, despite a clean payment history, are now struggling to meet current affordability criteria in the market.

For all remortgage applications made from today that don’t require any additional borrowing, the Society is increasing the maximum loan-to-income it will accept to 6.5x income up to the existing 90% Loan to Value (LTV) limit.

Read more:

Bank of England slammed for ‘irresponsible and unnecessary’ rate rises damaging the housing market

Inflation is impacting house price growth for the average seller

Accord Mortgages has launched a new residential product range that offers up to 5.5 times loan-to-income

Interest rate hikes predicted to see mortgage transactions fall by 6%

Applications will continue to be subject to Nationwide’s affordability assessment. This will be with the lower stress rate for like-for-like remortgages, following the reduction made in January 2020 from the previous 3% above Standard Based Mortgage Rates (SMR).

Henry Jordan, director of mortgages at Nationwide Building Society, said, “Given the current squeeze on household finances, the ability to get the best possible mortgage deal has never been as important. The ability to borrow enough can be a barrier when people look to remortgage, even when they can demonstrate a clean payment history.

“The remortgage market continues to remain strong as people look to try and counter the rising cost of living by securing a better rate on their mortgage or fixing their mortgage payments.

“By increasing the maximum loan-to-income, we are giving people who don’t need any additional borrowing more opportunity to change lender and save money, and potentially helping those mortgage prisoners who have been unable to remortgage to a better deal until now.

“As a responsible lender, we always ensure that borrowers can afford their mortgage payments both now and in the future, which is why this increase is solely available on like-for-like remortgages where there is a clean, proven payment history.”

Leave a Comment

You may also like