Nationwide Building Society is tomorrow (21 January 2021) increasing the maximum loan term at 90 per cent LTV lending back to 40 years.
In July 2020, the Society became the first major lender to offer 90 per cent LTV mortgages without any restriction on volume. As a responsible lender, Nationwide did initially apply some enhanced criteria, which previously included temporarily restricting the maximum loan term to 25 years. Lending at all other tiers had remained at a maximum term of 40 years throughout the pandemic. Analysis from Nationwide’s HPI Affordability report shows that in 2020, around 70 per cent of first-time buyers took out a mortgage with an initial term of over 25 years, up from 45 per cent in 2010.
The Society continues to expand its higher LTV lending having moved to offering 90 per cent LTV loans to house purchasers and existing members moving home at the end of last year as well as first-time buyers.
At the start of December, Nationwide enhanced its service by removing some processes brought in to help deal with the significant number of mortgage applications submitted to the Society last year. Standard cases, including those at 90 per cent LTV, now go from application to offer in an average of 15 days – half the time it was taking at the start of December. Details of latest service levels can be found here.
Nationwide continues to receive a high level of applications as borrowers look to take advantage of the Stamp Duty holiday that is due to end in March. The Society has added additional resource to its teams to help process as many cases as possible by the deadline.
Henry Jordan, Director of Mortgages at Nationwide Building Society, said: “As a responsible lender we initially made a cautious re-entry back into the higher LTV market. However, as we become more comfortable lending in the current market, we are now in a position to revert to offering 90% LTV mortgages available with a maximum term of 40 years. We know that many borrowers, particularly first-time buyers, will opt for a longer term mortgage in order to help make their monthly mortgage repayments more manageable.
“The changes we made at the end of last year continue to have a positive impact our service levels with the time from application to offer halving in recent weeks. However, with the Stamp Duty holiday ending in March, we are likely to enter a peak period. We are grateful to all brokers who continue to submit new cases while, at the same time, managing their clients’ expectations on the likelihood of their application completing before the deadline.”
