Nationwide boosts first time buyer mortgage lending by £1billion with new low deposit products

9 September 2015

  • New range of fixed rate products for homebuyers with a 5% deposit
  • Sub 4% rates on 2 year fixed rate deals available through brokers and direct

Nationwide is launching £1billion of additional lending over the next year for house buyers with a 5% deposit, providing a fresh range of options for those looking to take a step onto the housing ladder.

From Thursday 10 September 2015, the Society is offering a new range of competitive fixed rate 95% LTV mortgage deals, starting at under 4%. The products are not part of any scheme, such as Help to Buy, and are available to both first time buyers and home movers. The new mortgages will also be offered both through brokers as well as direct through Nationwide.

Nationwide aims to support one in five first time buyers into a home of their own.

Market data suggests that almost four in five (79%) first time buyers choose to access mortgage deals through a broker and the new 95% LTV range will widen the choice brokers can offer to those with small deposits.

This is the first time Nationwide has offered 5% deposit mortgages outside the limits of a scheme to all customers since 2008.

Rates for the competitive range of 5% deposit mortgages start from 3.99% with a £999 fee for the 2 year fixed rate deal. There are also 3 and 5 year fixed rate deals, starting at 4.59% and 4.79% respectively.

In addition, first time buyers will continue to receive a £500 cashback on all Nationwide mortgage deals. Combined with competitive rates, this enables first time buyers to access a strong overall mortgage package.

Nationwide’s flagship Save to Buy scheme, through which buyers commit to saving towards a deposit and in return receive a cashback of up to £1,000 on completion of their Save to Buy mortgage, will be available at a 0.20% discount. Rates for the 2 year fixed rate mortgage product start from 3.79% with a £999 fee.

Henry Jordan, Nationwide’s Head of Mortgages, said: “Nationwide’s move significantly increases the Society’s lending in the first time buyer market and widens consumer choice. It aims to build on Nationwide’s traditionally strong support for first-time buyers by offering more mortgage options to those with smaller deposits and helping them to achieve their dream of purchasing a home of their own.

“Nationwide also offers tangible benefits to mortgage customers that go beyond the competitive headline rates. This includes Nationwide’s £500 cashback offer to all first time buyers, or more if they use our Save to Buy mortgage products. Our mortgage deals, combined with other support Nationwide provides such as first time buyer events and independent guides, demonstrate how Nationwide continually aims to do more for its customers.”

Notes to Editors

Save to Buy:

The savings element

Save to Buy is a regular savings account paying a competitive rate to enable customers to save towards a deposit. The accounts can be opened with just £50 and customers have to save at least £50 per month for six months or more. 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.

Details of the 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.

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 90.01% 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.
  • 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.

Details of the Fixed Rate Deal Period
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:

A) 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:

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

B) 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.