Nationwide explains £28,000 boost for homeowners from today | Personal Finance | Finance

Nationwide has confirmed it has lowered its stress rates from 0.75 and 1.25 percentage points, meaning applicants can borrow more. This is the case whether first-time buyers, moving up the property ladder, or remortgaging.

From today, Friday May 16, applicants will be able to borrow an extra £28,000 on average. Nationwide is reducing both its standard stress rate and the rate applied to eligible first-time buyers and home movers who fix their deal for at least five years.

This change will benefit all types of borrowers, including first-time buyers who, where eligible, can also take advantage of Helping Hand, which allows borrowing up to six times their income, up to a 95 per cent loan-to-value ratio.

The most significant increase in the borrowing amount is expected on remortgages where there is no additional borrowing. These fall outside the flow limit and are therefore unlikely to be capped at 4.5 times income.

Nationwide said it has been able to implement this change due to the recent rule clarification on stress rates by the FCA.

Henry Jordan, Nationwide’s Director of Home, said: “Affordability remains a key challenge and this change, along with our well-established and popular Helping Hand proposition, shows we’re serious about tackling it.

Whilst the FCA’s clarification on affordability stress rates could support increased levels of home ownership, the Bank of England’s flow limit dampens its potential impact. That’s why Nationwide continues to call for a review of the 15 per cent limit, so that we, and other lenders, can help more people access the long-term benefits of home ownership.”