Nationwide Extends Helping Hand Scheme

The building society Nationwide has announced that it is extending its Helping Hand scheme which supports first-time buyers in securing a mortgage.

Previously, the scheme allowed customers to borrow a boosted 5.5 times their salary when taking a 90% LTV mortgage on either a five or ten-year fixed-rate mortgage. From Friday 11^th February this same deal will now be available on mortgages up to 95% LTV.

For customers earning a combined salary of £60,000, this now means that customers choosing a 95% LTV mortgage will be able to borrow up to £330,000, up from the normal limit of £270,000.

Support needed for first-time buyers

The announcement comes as Nationwide continues to help turn ‘Generation Rent’ into ‘Generation Buy’, in its own words. The Helping Hand scheme has always been aimed at first-time buyers earning an average income, unlike some similar schemes from other providers that are targeted more at high-income individuals and couples.

The counterbalance is that the Society has to ensure it is lending responsibly, and so customers will undergo extensive credit checks that may be more robust than normal, to ensure that no one is borrowing money they can’t afford to repay.

But to help first-time buyers, even more, they all benefit from £500 cashback on completion of their mortgage.

Alongside saving for a deposit, the ability to borrow enough on their mortgage continues to be a significant hurdle to home ownership. As one of the leading lenders to first-time buyers, we have played our part in tackling that key challenge through Helping Hand during a time when house prices have continued to rise.

As a mutual, we were founded to support people into their first home and that remains at the heart of what we do. We know that raising even a 10 per cent deposit can be tough for some, which is why we are extending Helping Hand to our 95 per cent Loan-to-Value range and, in doing so, helping more people get a home of their own.

Henry Jordan, Director of Mortgages at Nationwide Building Society

Rising interest rates cause concern

The news is timely considering the Bank of England’s recent interest rate rises, which will make good-value mortgage deals harder to secure.

Mortgage customers who are on a variable rate or who are taking out a new mortgage will have to pay more for their monthly repayments due to the interest rate increase, which means any positive news for customers that could help them get a better deal will be warmly received.

Helping Hand won’t reduce the amount that customers pay — the interest rise will still see those rates rise — but it could help first-time buyers get the home they want with an extended budget, rather than having to climb the ladder with an intermediary home.

Over the last couple of years, some mortgages had been available with various providers under the 1% interest mark, but now that the interest rate has risen these have now all been taken off the market, and the lowest-priced mortgages are all on shorter-term deals.