Nationwide cuts rates on low deposit mortgages

20 January 2015

  • Save to Buy rates for those with 5 per cent deposit starting from 4.44%

From Wednesday 21 January, all of Nationwide’s 95 per cent loan to value (LTV) Save to Buy fixed rates have been reduced by up to 0.35%, with rates starting at 4.44% for prospective buyers with a 5% deposit.

As a result, the Society is offering a selection of competitive rates for those with small deposits through Save to Buy, an alternative to the Help to Buy: Mortgage Guarantee scheme. In addition to Save to Buy, Nationwide continues to help customers with smaller deposits as a leading supporter of the Help to Buy: Equity Loan scheme.

With Nationwide’s Save to Buy initiative, savings accounts can be opened with a minimum of £50, with customers saving at least £50 per month for six months or more. 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.

Richard Napier, Nationwide’s Director of Mortgages and Savings, said: “We are aiming to help aspiring homebuyers with smaller deposits to secure a home of their own. With Nationwide’s established Save to Buy scheme, customers who have demonstrated a history of saving are being given the opportunity to access a range of competitive mortgage rates. This shows that good savings habits and strong credit quality go hand in hand.”

Key highlights include:

New 4.44% Save to Buy two year fixed rate up to 95 per cent LTV with £999 product fee (4.34% for existing Nationwide mortgage customers)

New 5.19% five year fixed rate up to 95 per cent LTV with £999 product fee (5.09% for existing Nationwide mortgage customers)

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.

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 Nationwide’s fixed and tracker mortgage product range for new applications

1. Flexibility:

  • Overpayments (maximum of 10% of the initial amount borrowed per annum where an ERC applies to the product. Where a product is not subject to an ERC, there is no maximum overpayment allowance).
  • Apply for a Further Advance, the additional borrowing facility.

2. Free Standard Valuation:

  • No standard valuation fees for homebuyers (on Flexclusive products only*) or for those who are remortgaging.

3. Free standard legal fees for house purchase (on Flexclusive products only*) cover the conveyancer’s professional charges relating to the house purchase only when using one of our panel legal firms. The customer will be liable for some additional fees relating to the disbursements, e.g. Land Registry fees and local authority searches. Due to Northern Irish law, Nationwide is unable to offer free legal fees for house purchases in Northern Ireland.

4. Cashback is payable one month after completion of the mortgage

5. Maximum LTV:

  • Lending above 85.01% is available on fixed rate mortgages.
  • 95% LTV mortgages are available to:
    • Existing Nationwide mortgage borrowers switching at the end of their current deal or moving home.
    • Save to Buy customers.
    • NewBuy customers
  • 90% LTV mortgages are available to:
    • Existing Nationwide mortgage borrowers switching at the end of their current deal or moving home.
    • First-time buyers and home movers.
  • First-time buyers can access 95% LTV products through Save to Buy and NewBuy.
  • Maximum 75% LTV on new build flats and 85% LTV on new build houses (90.01% to 95% LTV for approved NewBuy housing providers).

6. Base Mortgage Rate

  • Any mortgage products reserved on or before 29 April 2009 will revert to the Base Mortgage Rate (BMR). If the borrower chooses to switch to a new Nationwide mortgage product, the new product will currently revert onto our Standard Mortgage Rate (SMR).
  • Both are variable rates which we may vary in accordance with our mortgage terms and conditions. However, the BMR is guaranteed to be no more than 2% above the Bank of England base rate, whilst the SMR has no upper limit or cap. If the borrower chooses to switch to a new product from a BMR, it is not possible to switch back to the BMR at a later date.
  • 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.

7. Early repayment charges for fixed rate and tracker mortgages

Throughout the deal period, a percentage of the outstanding loan is payable as detailed below. Overpayments of up to 10% per annum are permitted without the need to pay an early repayment charge.

Percentage of the outstanding loan payable
Fixed Rate Deal Period
  2 years 3 years 4 years 5 years 10 years
Year 1 2% 3% 4% 5% 7%
Year 2 1% 2% 3% 4% 7%
Year 3   1% 2% 3% 7%
Year 4     1% 2% &7%
Year 5       1% 6%
Year 6         5%
Year 7         4%
Year 8         3%
Year 9         2%
Year 10         1%

*To get access to our range of Flexclusive offers customers must either:

1. hold a FlexAccount with a Visa debit card (not cash card or cash card+) and:

  • have been paying in £750+ a month (excluding internal transfers) for the last 3 months; or
  • complete an account switch to us (from a non-Nationwide account) using our Current Account Switch Team or have done so in the last 4 months; or

2. hold a FlexDirect or FlexPlus account.

About Nationwide

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 customers.

Customers can manage their finances in a branch, via the mobile app, on the telephone, internet and post. The Society has around 18,000 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.