"As a responsible lender we must factor this uncertainty into our lending assessments, which is why we have taken the decision to reduce our maximum LTV for new business."
From tomorrow, Nationwide will now lend up to a maximum LTV of 85% for house purchase, remortgages and lending to first-time buyers. Speaking to Financial Reporter, a Nationwide spokesperson confirmed that all products up to 85% can be accessed either direct or via a broker.
Existing members will continue to be able to switch to a new mortgage deal regardless of their LTV, providing there is no increase in LTV. Applications from existing mortgage members moving home that are above 85% LTV will also be considered on a like-for-like LTV basis.
Additionally, Nationwide is reducing fixed rates at 60% LTV by up to 0.10% for borrowers remortgaging to the Society. Two-year fixed rates will now start from 1.09% with a £1,499 fee and five-year fixed rates from 1.40% with a £999 fee.
In a statement, Nationwide said: "Due to these unprecedented times and an uncertain mortgage market, the Society has taken the prudent decision to reduce the maximum LTV borrowers can access in order to continue lending responsibly. These changes reflect both the current state of the market and follows similar moves by other lenders, whilst ensuring Nationwide continues to support the post-Covid recovery of the housing market."
Henry Jordan, director of mortgages at Nationwide Building Society, commented: “The outlook for the mortgage market and house prices remains uncertain. As a responsible lender we must factor this uncertainty into our lending assessments, which is why we have taken the decision to reduce our maximum LTV for new business.
“Our priority at this time must be to help members keep their homes. As such, we need to ensure our members can afford their repayments, while doing what we can to protect them from falling into negative equity.
“We will continue to keep this situation under review and hope to return to lending at higher LTVs in the near future.”
