As part of a revamp to its mortgage offering, Nationwide will be entering the equity release market, in line with its exploration into ways to help parents pass wealth onto their children and help homeowners unlock the wealth tied into their properties.
The lender is currently planning to roll out its own ‘safer’ range of equity release products, which come with no access charges or penalties and no-negative-equity guarantee. Looking to meet growing customer needs, Nationwide has stated it wants to offer a decent fixed interest rate and a no-negative-equity guarantee in order to remove the risk of repossession.
Although in the research and development stage of the process, this marks a positive move in helping older homeowners to release equity from their home and support children trying to step on the housing ladder.
This follows a number of other lenders joining the equity release market in recent months, including Legal and General’s announcement of its lifetime mortgages range, as well as a host of mainstream lenders looking to provide more support for older homeowners, by raising their maximum lending age limits.
Nationwide has stated the need for a product that makes it easier for customers to make capital repayments, while also evolving the lender’s capital and interest conversion process.
If that wasn’t all, the lender also announced this week it will be applying changes to its maximum income multiple for mortgages over 85% loan to value (LTV). Nationwide’s maximum income multiple for sole applicants in this bracket has been reduced to 4.5 times gross disposable income, while all other applications will be assessed under the society’s current income policy of 4.75 times income.
The buy to let arm of Nationwide, The Mortgage Works, has also made recent changes to its rental coverage calculation, raising it from 125% to 145%, while halting all lending at 80% LTV and above.