Nationwide Building Society is increasing the maximum LTV on its Helping Hand mortgage, allowing borrowers to apply with just a 5% deposit.

Nationwide’s Helping Hand offers first-time buyers the ability to borrow up to 5.5 times their income, when taking out either a a five- or 10-year fixed rate. Previously this product was only available up to 90% LTV. 

Nationwide said it will apply a lower stress rate and higher maximum loan-to-income ratio when applicants take out one of the society’s longer term fixed-rate products. It says this enables an uplift in affordability of up to 20 per cent.

First-time buyers using Helping Hand for enhanced affordability have access to Nationwide’s standard product range with consistent product rates, fees and features. All first-time buyers also benefit from £500 cashback on completion of their mortgage.

Applications will still be subject to robust underwriting checks, including full assessment of credit score and additional credit commitments.

Nationwide says that unlike other high loan-to-income mortgages, this product is available to those on standard salaries, not just those on higher earnings and fast-track career paths. 

Nationwide figures show that over the last 10 years, the house price to earnings ratio for a first time buyers has gone from 4.4 at the end of 2011 to 5.6 at the end of 2021. Over this time the average price paid by a first-time buyer for a property has increase from £139,472 to £214,638.

This increase in maximum LTV is effective from 11 February

Nationwide director of mortgages Henry Jordan says: “Alongside saving for a deposit, the ability to borrow enough on their mortgage continues to be a significant hurdle to home ownership. As one of the leading lenders to first-time buyers, we have played our part in tackling that key challenge through Helping Hand during a time when house prices have continued to rise.

“We know that raising even a 10 per cent deposit can be tough for some, which is why we are extending Helping Hand to our 95% LTV range.”