Nationwide Building Society is today reducing its maximum loan to value ratio (LTV) to 90% on all of its products for new borrowers except its three-year fixed rate and three-year tracker mortgages. New borrowers will need at least 10% deposit on all their products except the two mentioned above. New customers wanting to take out the group’s standard variable deal, which it calls its base mortgage rate, will now need a deposit of at least 25%, while the maximum amount the group will lend on any of its mortgages to new borrowers will be capped at £500,000. The two remaining products that Nationwide is offering to people with a small deposit are only available by going direct to the lender and cannot be obtained through brokers. Nationwide described the move, which takes effect from May 1, as part of its ‘ongoing approach of managing the business in a prudent and sustainable way’.
Posts Tagged ‘best rates’
Nationwide increases minimum deposit to 10%
Monday, April 28th, 2008Nationwide deposits up to 25%
Monday, February 25th, 2008Nationwide increased the minimum deposit required to secure its best rates from 10% of the value of the property to 25%. With the average price of a London house now more than £300,000, buyers will have to raise at least £75,000 up front. It is a major blow for first-time buyers in particular. The clampdown by Nationwide comes as banks and building societies tighten lending conditions following the credit crunch. Until today, borrowers needed only to raise a deposit of 10% or more to take advantage of Nationwide’s best rates. They now need 25% or more - or face an extra 0.2% of interest. The rise only affects new borrowers and wipes out the benefit they would have enjoyed following this month’s cut in interest rates by the Bank of England. Nervous rival lenders are set to follow suit as they chase margins rather than market share.
