Mortgage Repayment Vehicles
As part of our commitment to responsible lending, we will need to know how your clients intend to repay any interest only borrowing they are taking with us. We will accept the following repayment vehicles:
- stocks and shares ISA including one previously known as a PEP
- endowment policy
- pension plan
- sale of second property
- sale of main residence
- UK FTSE listed securities
- unit and investment trusts
- capital from Trust funds
- Premium Bonds
- annual repayment (e.g. reducing capital by lump sum payments)
- sale of foreign holiday home*
For the repayment vehicles in italics the target maturity value must be entered on IWS and within the 'Additional Information' box details about the repayment vehicle must be summarised, e.g. "£5,000 shares with Marks & Spencer."
*On IWS you must enter the value of the property in sterling in the 'target maturity value' field. The foreign holiday home must be owned by no-one other than your client(s).
Unfortunately, there will be some cases where Nationwide cannot accept your client's repayment method as it will not meet our responsible lending requirements. Sale of property to repay capital is subject to restrictions. If the property is your client's main residence, there must be £150,000 equity and borrowing must not exceed 66% of the value of the property. If the repayment vehicle is a second property, equity in that property must be at least 120% of the new mortgage that it is intended to cover. The property must be owned only by your client(s).
For paper applications not all of the above repayment vehicles are currently listed (they will be included in the next reprint). Should you choose an option not listed please detail the selected MRV in the notes section.
