Nationwide announces maximum LTI increase

Nationwide has increased the maximum loan-to-income (LTI) it will offer on its “like-for-like” remortgages.

The society will now accept 6.5 times the income up to the existing 90% LTV limit.

Nationwide said the change is aimed at supporting borrowers who are either looking to remortgage to get a better rate or those who are on a variable rate deal and want to fix their mortgage payments, amid the cost-of-living crisis.

Increasing the maximum LTI is also likely to benefit mortgage prisoners who despite a clean payment history, are now struggling to meet current affordability criteria in the market.

Applications will continue to be subject to Nationwide’s affordability assessment which will be with the lower stress rate for like-for-like remortgages, following the society’s reduction made in January 2020 from the previous 3% above SMR.

Nationwide director of mortgages, Henry Jordan, commented: “Given the current squeeze on household finances, the ability to get the best possible mortgage deal has never been as important. The ability to borrow enough can be a barrier when people look to remortgage, even when they can demonstrate a clean payment history.

“The remortgage market continues to remain strong as people look to try and counter the rising cost of living by securing a better rate on their mortgage or fixing their mortgage payments. By increasing the maximum LTI, we are giving people who don’t need any additional borrowing more opportunity to change lender and save money, and potentially helping those mortgage prisoners who have been unable to remortgage to a better deal until now.

“As a responsible lender, we always ensure that borrowers can afford their mortgage payments both now and in the future, which is why this increase is solely available on like-for-like remortgages where there is a clean, proven payment history.”

L&C Mortgages associate director, David Hollingworth, added: “This move should help give borrowers confidence that they can shop around, despite facing a backdrop of higher interest rates and rising costs of living.

“Those borrowing on a like-for-like basis will have a clear track record of meeting their payments and will feel that they should be able to take advantage of better deals by switching lender. It’s therefore good to see lenders thinking about how they can provide more flexible solutions to the right target groups.”

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