Nationwide celebrates third anniversary of Save to Buy

06 May 2014

More than 5,500 customers have so far bought a home with Nationwide’s Save to Buy scheme, which marks its third anniversary today (Tuesday May 6 2014).

The scheme enables both first time buyers and home movers to save towards a mortgage deposit for between six months and three years through a savings account or ISA. They can then apply for a home loan with just a 5 per cent deposit.

More than 62,000 accounts have been opened since the launch in 2011, with the average savings or ISA account balance being £4,233. It has put thousands of potential home buyers on or up the housing ladder since the launch in May 2011.

The most popular choice of mortgage taken out by Save to Buy customers is a Nationwide four year Flexclusive fixed rate mortgage, with an average deposit of 8 per cent. The average loan size is £147,828.

Save to Buy was originally launched to help first time buyers, but in January 2013 Nationwide widened the scheme to include home movers as well.

With Save to Buy, savings accounts can be opened with a minimum of £50, with customers saving for at least £50 per month for six months or more. First time buyers and home movers will then be eligible to apply for a Nationwide fixed rate mortgage. If the customer goes on to take a Save to Buy mortgage, depending on how much they save, there is also a cashback reward of up to £1,000.

Tracie Pearce, head of group mortgages at Nationwide, said: “Save to Buy has proved to be a success story for those customers looking to begin their journey to home ownership or to take the next step. In the last three years, we have helped thousands of customers aiming to move onto or up the housing ladder and Save to Buy is continuing to help tens of thousands of aspiring home buyers.

“Save to Buy was designed to benefit those customers who were able to demonstrate a history of saving, giving them an improved chance of obtaining a mortgage. It demonstrates that good saving habits and strong credit quality appear to go hand in hand.

“With issues of affordability of increasing importance, Save to Buy is providing the means for many customers to begin, and complete, the journey towards a home of their own.”

Nationwide is also working towards its ‘Your Home’ goal of helping 750,000 people move into a home of their own by 2017. This forms part of the Society’s wider citizenship role in delivering a greater social impact, and ensures Nationwide is focused on housing for those who most need it, including first time buyers and people in affordable and social housing.

Notes to editors:

Save to Buy:

The savings element

Save to Buy is a regular savings account paying a competitive rate of 2 per cent gross p.a. /AER. Customers have the choice of two account options:

  • Save to Buy ISA – a tax-free cash ISA that allows deposits up to the annual cash ISA limit each tax year
  • Save to Buy – an account that allows unlimited deposits up to £20,000

The accounts can be opened with just £50 and customers have to save at least £50 per month for six months or more, with the flexibility of not paying the minimum monthly amount for up to three months during a rolling 12 month period. If the customer goes on to take a Save to Buy mortgage, there is also a cashback reward of up to £1,000 – and the more they save, the more cashback they receive.

Save to Buy - Amount saved and Cashback reward
Amount saved Cashback reward
£2,500 - £4,999 £250
£5,000 - £9,999 £500
£10,000+ £1,000

The mortgage element

First time buyers and home movers, saving for a minimum of six months, will be eligible to apply for a Nationwide fixed rate mortgage of between 85.01% and 95% LTV (two year fixed rates have a maximum LTV of 90%). The extension of the Save to Buy product to home movers means borrowers with a small amount of equity have the possibility of being able to move.

Key features of the fixed and tracker mortgage product range for new applications

  • Flexibility:
    • Overpayments (no minimum; maximum of £500 per month on fixed and tracker mortgage deals).
  • Standard Mortgage Rate
    • Mortgage products reserved on or after 30 April 2009 revert to the Standard Mortgage Rate (SMR).
    • The SMR is a variable rate which may vary in accordance with Nationwide’s mortgage terms and conditions.
  • All mortgages reserved on or before 3 March 2010 include the option to apply for a payment holiday and borrow-back facility. Any mortgages reserved after this date will no longer include these facilities.
  • If the borrower is currently letting their property they will be unable to switch to a new mortgage deal and their mortgage will automatically revert to the Nationwide variable rate as stated in their mortgage offer.
  • Early repayment charges for fixed rate mortgages

    Throughout the deal period, a percentage of the outstanding loan is payable as detailed below. Overpayments of up to £500 per month are permitted without the need to pay an early repayment charge.

    • Two-year fixed rate mortgage: 2%
    • Three-year fixed rate mortgage: 3%
    • Four-year fixed rate mortgage: 3%
    • Five-year fixed rate mortgage: 4%
    • A £99 non-refundable booking fee may apply.
    • Applications are required for all products. Further details of terms and conditions are available on request.
    • Mortgages are subject to underwriting criteria.

About Nationwide Building Society
Nationwide is the world's largest building society as well as one of the largest savings providers and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million members.

Customers can manage their finances in branch, on the telephone, internet and post. The Society has around 15,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

Please note: If you are a customer looking for information on our products and services, please visit the main website.