Nationwide is today adjusting its mortgage affordability calculation by reducing its stress rates by between 0.75 and 1.25 percentage points, helping applicants to borrow more – whether buying a first home, moving on to the next property or remortgaging.
Applicants will be able to borrow, on average, £28,000 more from today. Nationwide is reducing both its standard stress rate and the rate applied to eligible first-time buyers and home movers fixing their deal for at least five years.
The change will benefit all types of borrowers, including first-time buyers who, where eligible, can also benefit from Helping Hand, which enables borrowing up to six times their income, up to 95 per cent loan-to-value. The largest boost to the borrowing amount is expected on remortgages where there is no additional borrowing. These fall outside the flow limit and are therefore unlikely to be capped at 4.5 times income.
Nationwide has been able to make this change due to the recent rule clarification on stress rates by the FCA. This confirmed the option to stress affordability with reference to product rather than revert rates.
How much more can be borrowed?
The following examples are based on two applicants (examples illustrative and the amount that can be borrowed will be dependent on an applicant’s individual circumstances):
| First-time buyer with Helping Hand | Home mover | Remortgage1 |
| Product: 5- or 10-year fixed rateIncome: £55,000Term: 27 yearsMax loan before:£304,200Max loan after: £330,000Uplift: £25,800LTI before: 5.53xLTI after: 6x | Product: 5- or 10-year fixed rateIncome: £75,000Term: 25 yearsMax loan before:£307,000Max loan after:£336,800Uplift: £29,800LTI before: 4.09xLTI after: 4.49x | Product: AllIncome: £45,000Term: 40 yearsMax loan before:£235,500Max loan after:£278,100Uplift: £42,600LTI before: 5.23xLTI after: 6.18x |
Even with these changes, Nationwide continues to have a range of criteria and underwriting checks so that it can lend responsibly at the same time as addressing the affordability challenge many homebuyers and existing homeowners find themselves in.
High loan-to-income (LTI) lending
Nationwide already supports first-time buyers to borrow more through its Helping Hand mortgage proposition. However, the Bank of England’s Financial Policy Committee LTI flow limit caps the amount of lending at or above 4.5 times income to no more than 15 per cent of their total qualifying loans.
While the latest adjustments will help boost borrowers’ affordability, Nationwide needs to continue to manage its lending relative to this limit. This is why Britain’s biggest building society, which supported more first-time buyers in 2024 than any other lender, is calling for the Bank of England to review the flow limit.
Henry Jordan, Nationwide’s Director of Home, said: “Affordability remains a key challenge and this change, along with our well-established and popular Helping Hand proposition, shows we’re serious about tackling it. Whilst the FCA’s clarification on affordability stress rates could support increased levels of home ownership, the Bank of England’s flow limit dampens its potential impact. That’s why Nationwide continues to call for a review of the 15 per cent limit, so that we, and other lenders, can help more people access the long-term benefits of home ownership.”
