The building society announced its return to this area of the mortgage market in April when, following an eight-year absence from interest-only lending, it introduced the deals for remortgaging customers.
Now its interest-only range, available through brokers, will also allow more flexibility for customers making home purchases.
Henry Jordan, Nationwide’s director of mortgages, said: “Interest only lending remains an important part of the market, especially for those with a good level of equity in their home.
“Since we re-entered the market earlier this year, we have seen good demand from borrowers and are pleased we can now expand our interest-only range to purchases as well as remortgages.
“As the UK’s second largest lender, it is natural that we continue to look at ways we can support the mortgage market, including the products we make available through brokers and we hope to expand our range further in the near future.”
Deals will be offered for purchase and remortgage 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 the products are the same as its capital repayment mortgages and start from 1.24%.
Repayment will be restricted to the sale of the main residence only, with part interest-only and part capital repayment mortgage also allowed subject to the same criteria.
Anyone applying for these deals 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).
Brokers have welcomed the news of Nationwide’s return to interest-only lending for purchases.
Martin Stewart, director at London Money, said: “The good news seems to keep rolling in at the moment and this is a fantastic announcement from Nationwide to open up their interest-only offering to now include purchase applications.”
‘Brilliant’ client outcomes
Meanwhile, Greg Cunnington, director of lender relationships and new homes at Alexander Hall, said: “Interest-only mortgages are a great option for some clients and are a core part of the holistic advice discussion for intermediaries, so this was a great show of support to the intermediary market from Nationwide.
“We have seen some brilliant client outcomes from these products since their launch, and our advisers have fed back that the processing is very straight forward thanks to clear communication on the submission process and packaging required.”
He added: “The purchase market remains buoyant, with lots of pent up demand from the lock down period and buyers wanting to take advantage of the stamp duty holiday.”
