NatWest has announced the launch of shared ownership mortgages, saying it aims to provide "greater accessibility and flexibility to customers aspiring to become homeowners".
NatWest will allow customers to borrow to fund purchases from a minimum of a 25% share, whilst paying rent on the proportion of the house that they don’t own.
Over time customers have the option to purchase additional shares (known as staircasing) to increase their share of the property.
Today’s news follows NatWest’s launch of the Family Backed Mortgage in April, which allows customers to boost the amount they can borrow by combining their income and the income of a family member or friend.
Shared ownership mortgages will be available to customers making new purchases and remortgaging, inclusive of staircasing scenarios. Shared ownership mortgages will initially be made available exclusively via mortgage brokers.
NatWest’s shared ownership borrowing isn’t linked to any individual NatWest product and is available on mortgages up to 95% LTV including new build and green mortgage options.
Shared ownership mortgage customers will also be able to apply for additional borrowing after six successful mortgage payments. Additional borrowing will be initially limited for staircasing purposes only.
In addition, NatWest has also announced enhancements to its lending criteria for customers purchasing new build property and taking out interest-only mortgages. From today, mortgage customers purchasing new builds will be able to access 90% LTV borrowing on flats and 95% LTV on houses.
NatWest will also increase LTV borrowing limits on interest-only mortgages from 50% to 75% where the sale of the property is the main repayment strategy and from 75% to 80% where other investments is the repayment strategy. To be eligible for interest-only borrowing customers need to earn a minimum of £75,000 individually or £100,000 as a couple.
Lloyd Cochrane, head of mortgages at NatWest Group, commented: "We want as many of our customers as possible to be able to buy their own home. Today’s launch of shared ownership mortgages means we are bringing more choice for customers who are thinking about the ways in which they can get on the housing ladder.
"We have also made improvements to our borrowing criteria meaning customers can buy a new build flat or house with a lower deposit. Together these changes mean we can help to bring the dream of home ownership within reach of more customers sooner."
