Nationwide Boosts Borrowing Power for Remortgaging Customers

Nationwide, the world's largest building society, is making it easier for some customers to borrow more by changing its mortgage affordability calculations. The new policy, which took effect on Tuesday, August 12, allows eligible customers to access significantly higher loan amounts, particularly when remortgaging from a different lender.

According to Nationwide, a couple or individual earning £70,000 could now borrow up to £314,300, a substantial increase of £33,600. This calculation is based on a mortgage with a remaining term of 20 years. This change, however, is not universal and comes with specific conditions. The enhanced borrowing power is exclusively available to customers who choose a five- or ten-year fixed-rate mortgage. Homeowners opting for shorter fixed terms will not be eligible for the increased loan size.

Henry Jordan, Nationwide's Director of Home, explained the rationale behind the new policy. "The ability to borrow enough can be a barrier when people look to remortgage, even when they can demonstrate a clean payment history," he said. "We're pleased to be able to help them by making this change, which should put Nationwide front of mind for those wanting a new mortgage deal."

He also emphasized Nationwide's broader commitment to supporting a variety of borrowers, citing the "Helping Hand" initiative for first-time buyers and enhanced affordability options for home movers. The building society stated that this new approach "provides higher affordability for eligible customers who'll have a track record of mortgage payments and greater payment security through a rate fixed for at least five years," which aligns with the lender's focus on responsible lending.

The move comes at a time when the UK housing market continues to face affordability challenges. By offering greater borrowing capacity to existing homeowners who have a proven history of making mortgage payments, Nationwide is aiming to capture a larger share of the remortgaging market and help customers manage their finances in a period of economic uncertainty.