Nationwide launches London Help to Buy Equity Loan products

27 January 2016

  • Larger equity loan of up to 40 per cent of property price available in London boroughs from 1 February
  • Shared equity fixed rate and tracker products with rates from 1.64% available from 28 January

Nationwide Building Society is launching a new range of shared equity mortgage deals, covering all schemes including the Government’s expanded London Help to Buy Equity Loan scheme, from Thursday 28 January.

An extension of the existing Help to Buy Equity Loan scheme in England, of which Nationwide has been a major provider of mortgage lending since May 2013, the London scheme will be open for mortgage applications from 1 February.

Under the original scheme, the Government provided customers purchasing a new build home with an equity loan of up to a maximum of 20 per cent of the purchase price, with the customer providing a minimum 5 per cent cash deposit. From 1 February, this will be extended so that borrowers in the London boroughs will be able to apply for an equity loan of up to 40 per cent, thereby allowing customers to access a mortgage at a lower LTV.

The maximum property price for the scheme in England remains at £600,000, including in Greater London, with different thresholds for the schemes in Scotland and Wales. More than three quarters of Help to Buy Equity Loan borrowers are first time buyers, who qualify a £500 cashback on a Nationwide mortgage deal, with or without a fee. In addition, all Nationwide mortgage applicants can access a fee-free standard valuation and a further £250 cashback if they have a Nationwide Flex* main current account.

Nationwide is providing competitive mortgage rates as part of a separate shared equity range, which includes the Help to Buy Equity Loan schemes. From Wednesday 27 January, the 2 year fixed rate products at 60 per cent LTV will be 1.89% with a £999 fee and 2.29% with no fee. At 75 per cent LTV, 2 year fixed rates start at 1.99% with a £999 fee and 2.39% with no fee.

Rates for the 5 year fixed rate shared equity products start at 2.64% for those up to 60 per cent LTV with a £999 fee and 2.84 per cent with no fee. At 75 per cent LTV, rates start at 2.74% with a £999 fee and 2.94% with no fee.

With the 2 year tracker mortgages deals, rate shared equity products start at 1.64% with a £999 fee and 2.04% with no fee up to 60 per cent LTV. These tracker products are free of early redemption charges.

Henry Jordan, Nationwide’s Head of Mortgages, said: “Nationwide is launching a range of competitive shared equity products ahead of the launch of the expanded London Help to Buy scheme, enabling homebuyers to access a choice of mortgage deals with fee-free valuations as well as a £500 cashback for first time buyers. The Society has provided a substantial proportion of mortgages for the Help to Buy Equity Loan scheme since its launch, and will continue to do so as it is expanded, continuing to help first time buyers and home movers to secure a home of their own.”

Notes to Editors

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 or for those who are remortgaging.
  3. Free standard legal fees for remortgage 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:
      • First-time buyers and home movers.
      • Existing Nationwide mortgage borrowers switching at the end of their current deal or moving home.
      • Nationwide Help to Buy ISA 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.

    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); or
    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.