Nationwide Building Society is increasing its maximum age for mortgage maturity from 75 to 85, in a move that forms part of its ongoing plan to bring more flexibility and choice to older borrowers.
This will give Nationwide the highest age threshold of any high street lender. The revised criteria will be effective from July 2016 and is the first in a series of enhancements that aims to offer greater support to borrowers in retirement.
The change will enable existing mortgage customers with retirement income to borrow up to the age of 80, with a maximum age at maturity of 85. A range of mortgage borrowing needs will be supported, including house purchase and further advances.
The option will be available on all standard Nationwide mortgage products up to 60 per cent loan-to-value (LTV) and a maximum loan size of £150,000.
It is the latest in a series of measures from Nationwide to reflect changing customer needs as part of its commitment to review and update how it caters for borrowing into retirement. In February, Nationwide simplified its approach to assessing retirement income, and it now use the customer’s anticipated retirement age rather than the state pension age, up to a maximum age of 70.
Henry Jordan, Nationwide Head of Mortgages, said: “We are taking a series of steps to meet a growing demand from customers to be able to borrow in later life. These customers are often asset rich, with significant equity in their home, and they wish to have the flexibility to borrow against it.
“Access to the mainstream market has been a challenge for older customers, resulting in their needs going unfulfilled. This measure helps to address these needs in a prudent, controlled manner. Nationwide is committed to providing a range of options for all customers and this will be the first step toward developing a wider range of options for those looking to borrow into retirement.”
Notes to Editors:
Key features of Nationwide’s fixed and tracker mortgage product range for new applications
- 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. Cashback is payable one month after completion of the mortgage, with the exception of the following:
- For Flex customers applying through the introduced channel the cashback is payable up to three months after completion of the mortgage
4. Maximum LTV:
- Lending above 90.01% is only 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.
- Save to Buy customers.
- Maximum 75% LTV on new build flats and 85% LTV on new build houses
5. 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.
6. Early repayment charges (ERCs)
If you repay a mortgage early or make an overpayment of more than your overpayment allowance, you may need to pay an Early Repayment Charge. For Nationwide mortgages reserved after 8 October 2014, you would need to pay a percentage of the outstanding loan amount as follows:
|Fixed Rate Deal Period|
| ||2 years||3 years||4 years||5 years||10 years|
|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.
*Flexclusive mortgages are available to Nationwide main current account holders who:
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:
- Been paying in £750+ a month for the last 3 months (excluding internal transfers); Or
- 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