Nationwide Celebrates Fourth Anniversary Of Save To Buy

6 May 2015

  • More than £1 billion loaned to Save to Buy customers for a home of their own
  • 90,000 Save to Buy Savings Accounts and ISAs opened

More than 8,000 homes have so far been purchased with Nationwide’s Save to Buy scheme, which marks its fourth anniversary today (Wednesday May 6 2015).

Approximately £1.1 billion has so far been loaned to both first time buyers and home movers who have saved towards a mortgage deposit for at least six months through a Save to Buy Savings Account or ISA. They are then able to apply for a home loan with just a 5 per cent deposit.

More than 90,000 Save to Buy accounts have been opened since the launch of Save to Buy in May 2011, with the current average savings or ISA account balance being £5,714.

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

In addition:

  • The average loan size for Save to Buy mortgage applicants since launch, of which the majority are first time buyers, is £145,000.
  • The average deposit is £13,900.
  • On average, Save to Buy first time buyers are aged 30, while home movers are 32.
  • Three quarters of Save to Buy mortgage applications are made in joint names.

Andrew Baddeley-Chappell, Nationwide’s Head of Policy for Mortgages and Savings, said: “At a time when the industry is developing plans to launch the Help to Buy ISA, Nationwide’s Save to Buy is providing a successful means for many customers to begin, or complete, the journey towards a home of their own. Over four years, we have helped many thousands of customers aiming to move onto or up the housing ladder to achieve their aspiration.

“Many people do not have the bank of mum and dad to depend upon. We have focussed our support on those who prudently plan ahead, save regularly and think about what they might need to apply successfully for a mortgage before finding a home. Save to Buy helps mortgage applicants demonstrate good saving habits, money management and planning. Through this approach, we have helped our customers to help themselves to access low deposit mortgages and cashbacks to help with the costs of moving home.

“Save to Buy helps Nationwide mortgage applicants to demonstrate how good saving habits and strong credit quality go hand in hand.”

The most popular choice of mortgage taken out by Save to Buy customers has been a Nationwide four year Flexclusive* fixed rate mortgage, with an average deposit of 8 per cent. Two thirds of all Save to Buy loans are made at up between 90 and 95 per cent loan to value (LTV).

With Save to Buy, savings accounts can be opened with a minimum of £50, with customers saving at least £50 per month for six months or more. First time buyers and home movers are then 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.

Nationwide continues to work towards its goal of helping 750,000 people move into a home of their own by 2017. This forms part of the Society’s wider citizenship strategy to deliver 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.

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.
    • 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.
    • Maximum 75% LTV on new build flats and 85% LTV on new build houses
  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.

    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%

ERCs don’t currently apply to our Tracker Rate mortgages.

*To get access to Flexclusive offers you must either:

  1. Hold a FlexOne account and be aged 18 or over, or hold a FlexAccount with a Visa debit card (not cash card or cash card+) and have:
    1. Been paying in £750+ a month for the last 3 months (excluding internal transfers);
    2. Completed an account switch to us (from a non-Nationwide account) using our Current Account Switch Team 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.