Nationwide is giving first-time buyers a boost by lending up to six-times income, in a bid to support those looking to step onto the property ladder.
The building society will extend the maximum loan-to-income (LTI) ratio available through its Helping Hand – the mortgage boost for first-time buyers launched in 2021.
The extended Helping Hand mortgage will be available from Tuesday 24th September and will give first-time buyers the option of borrowing up to six-times income when taking a 5- or 10-year fixed rate up to 95% loan-to-value (LTV).
This will give potential homeowners a 33% uplift compared with Nationwide’s standard lending at 4.5-times income.
The change means a first-time buyer couple with a joint income of £50,000 can now borrow up to £300,000 with Helping Hand, compared to £225,000 without, an increase of £75,000, assuming a 5% deposit and no other costs impact affordability.
In further support to first-time buyers, Nationwide is also cutting mortgage rates.
First-time buyer rates will be reduced by up to 0.31%, making Nationwide the first major lender to offer a sub-5% rate on its standard range to those with a 5% deposit.
These rates will also be effective from Tuesday 24th September.
Nationwide is also increasing its maximum loan sizes, including those above 90% LTV, which will increase from £500,000 to £750,000.
Debbie Crosbie, chief executive at Nationwide, said: “Helping Hand has supported around 40,000 people onto the property ladder since we launched it three years ago.
“We want to do more and are boosting the scheme to six times income and increasing the maximum loan size.
“This, alongside our most recent rate cuts, further strengthens our market-leading position and demonstrates that, as one of the UK’s largest lenders, Nationwide continues to put first-time buyers first.”
Reaction:
David Hollingworth, associate director, communications at L&C Mortgages:
“Helping Hand has been a front runner in expanding the range of options open to first-time buyers who continue to struggle with affordability.
“Building an adequate deposit is hard enough especially when the available mortgage borrowing is capped, and prices remain high.
“Opening the potential for higher borrowing amounts for the right borrowers will help target the twin challenges that first-time buyers face across the UK.
“Using the existing experience and success of Helping Hand to further enhance the maximum multiple will give more prospective first-time buyers the hope that ownership can become a reality.”
Matt Smith, mortgage expert at Rightmove:
“This package of measures is an encouraging development in the first-time buyer market, as it directly addresses a major barrier that many face in being able to borrow enough to take that important first step on the housing ladder.
“It is likely to be particularly beneficial in areas such as London and the South East where house prices are higher, and currently the average asking price of a home is more than five times the average salary of two people.
“We’ve been highlighting affordability as a key issue facing first-time buyers this year and calling for innovations that help overcome these challenges in a responsible way.
“We welcome this move and hope this is the start of a new and accelerated wave of support for first-time buyers.
“The timing of this announcement will be welcomed by many first-time buyers, as we’re seeing a much more active housing market than at this time last year, with buyer demand increasing into the traditionally busy Autumn season.”
Nicholas Mendes, mortgage techincal manager and head of marketing at John Charcol:
“Nationwide’s latest initiative is a game-changer for first-time buyers, delivering a powerful boost to help more people step onto the property ladder.
“Nationwide is truly putting ‘first-time buyers first’ and addressing the significant affordability issues many face today.
“For the first time, a major lender is offering this enhanced loan-to-income (LTI) ratio, making it possible for a couple earning £50,000 jointly to secure a £300,000 loan—an impressive £75,000 more than the typical borrowing limit.
“This increased borrowing power can make all the difference for aspiring homeowners, especially in a challenging market where property prices often feel out of reach.
“This bold move from Nationwide goes beyond just lending—it demonstrates the building society’s commitment to supporting first-time buyers and ensuring that being a member of a modern mutual offers tangible value.
“Since launching its Helping Hand initiative in 2021, Nationwide has already supported 40,000 first-time buyers, lending over £7.5bn.
“These latest enhancements show that Nationwide is not resting on its laurels but is doubling down on its efforts to empower more people to achieve the dream of homeownership.
“The future is looking brighter for first-time buyers, thanks to Nationwide’s forward-thinking approach to lending!”
