Nationwide Building Society has added interest-only to its mortgage range – initially offering the product through brokers only.
This Nationwide had recently confirmed its re-entry into the residential interest-only market after an eight-year absence.
It will be offered for remortgages only at a maximum of 60% loan-to-value (LTV) and will require a minimum equity of £300,000 in London, £250,000 in the South East and £200,000 across the rest of the UK.
Rates on start from 1.29%. Anyone applying will need a minimum income of £75,000 for sole applications (or £100,000 if joint) and the product will come with a maximum term of 25 years (or retirement age if that is sooner).
Henry Jordan, Nationwide’s Director of Mortgages, said: “As the UK’s second largest lender, it is natural that we continue to look at ways we can support the mortgage market.
“At almost 7%, interest-only remains an important part of the market, which is why we are launching this new product, initially via brokers.
“During these unprecedented times, it is important to continue offering a variety of options and flexibility to homeowners and, by adding interest only, we are providing access to our standard product range to applicants with good equity.”
Martin Stewart, director at London Money, added: “I think this is a great initiative from Nationwide and brings them in line with the other major high street lenders in the UK.
“The interest-only market has evolved a lot over the past 10 years and, in doing so, we are now focusing on the opportunities where interest-only is a viable alternative for the borrower.
“I know Nationwide, as a responsible lender, has spent a lot of time on its due diligence to make sure its offering is the right one. I believe that it is, and this new initiative should see them begin to challenge their competitors in what is a very active part of the market.”
Greg Cunningham, director of lender relationships and new homes at Alexander Hall, said: “It is really positive to see Nationwide returning to the interest-only market especially when clients, now more than ever, need the widest range of available options.
“Interest-only mortgages are a core part of the holistic advice discussion for intermediaries and, I’m sure I speak for many of them when I say, I’m delighted to see Nationwide showing their support in this way.”