Nationwide further extends borrowing into retirement

16 June 2016

Nationwide Building Society has announced that its new maximum age for borrowing of 85 will apply to both existing mortgage customers and those remortgaging from other lenders from mid-July.

As part of an ongoing plan to bring greater flexibility and choice to older borrowers, the Society had already announced it was to allow existing Nationwide mortgage customers with retirement income the option of borrowing up to the age of 85, giving Nationwide the current highest age threshold of any high street lender.

Now the opportunity will be extended from launch to those borrowers remortgaging to Nationwide from other lenders and fitting the same criteria. The option will initially be made available from mid-July through mortgage intermediaries only, with the opportunity to apply directly through Nationwide planned to follow in August.

The option will be available across the product range, with a limit for any new borrowing of £150,000. Loan to value (LTV) will be limited to a maximum 60 per cent. The maximum age at application is 80. The criteria will be the same for both existing Nationwide mortgage customers and those remortgaging from other lenders.

Henry Jordan, Nationwide Head of Mortgages, said: “We are continuing to work towards increasing the ways to serve both new and existing customers looking to access the equity in their homes and borrow against it, supporting a range of needs in retirement. Our research has shown that older borrowers predominantly look to use their primary asset, their home, to give both them and their family more choice about their lifestyle options. This may include altering their homes or providing financial support to family, such as helping a relative to raise a deposit.

“This is another stage in Nationwide’s drive to widen choice for customers, but we recognise the risks that can accompany borrowing at an older age, so we are taking a balanced and prudent approach. Customers will need a stable and ongoing retirement income and we will reflect the additional risks that older borrowers may face by basing our assessment for joint borrowers on the proportion of income which will continue, should part of that joint income be lost during the mortgage term. Nationwide will continue to look to strengthen our support for older and retired customers.”

This 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 in retirement. In February, Nationwide simplified the definition of a client's retirement age, and now use only the client's anticipated retirement age rather than the state pension age, up to a maximum age of 70.

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. 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 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

Year 7

Year 8

Year 9

Year 10


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

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.