Borrowing criteria
Acceptable loan purposes
As well as borrowing for the purchase of a home, your client may borrow extra money:
- Additional borrowing (further advance)*
- Additional borrowing with a remortgage
- Borrowing on a mortgage free property
*For additional borrowing (further advance), please see the additional borrowing page for the acceptable loan purposes.
The purpose of the borrowing must be detailed in full on the mortgage application form.
| Acceptable loan purpose | Maximum LTV | Additional information | |
|---|---|---|---|
|
Non-structural home improvements |
90%* |
This includes boiler replacement, new kitchen or bathroom, replacing double glazing or central heating installation. | |
| Structural home improvements | This includes internal wall removal, extending a property, major roof works or a new staircase. | ||
| Buy final share in shared ownership |
Please key as a shared ownership application on the loan requirements screen of NFI Online. |
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| Buy additional share in shared ownership | |||
| Buy freehold title or new extended lease |
Please key the new lease term on the application, for example, if the current lease is 55 years but when completed it'll be 150 years, key 150 years. Please contact us for shared ownership applications. |
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| Buy a share in the freehold |
This isn't allowed on shared ownership. |
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| Buy land to extend security |
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| Buy out partner's interest (non-borrower) |
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| Buy land or property separate from the security |
Borrowing to buy a property/land that'll then be let out isn't acceptable This isn't allowed on shared ownership and right to buy (within the discount clawback period). |
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| Repay Help to Buy Equity Loan |
A Help to Buy Equity Loan (including Scottish First Home Fund) must be repaid in full and no other additional borrowing can be requested as part of the remortgage application. If the LTV doesn't exceed 80% this should be keyed as 'Pay off second charge' on NFI Online. |
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| Other personal consumption |
This includes holiday, car or school fees. We don’t lend for business purposes. This isn't allowed on shared ownership and right to buy (within the discount clawback period). |
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| Like for like remortgage |
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| Remortgage with additional mortgaged properties in the background |
85% | This includes second home or buy to let property | |
| Repay unsecured debts (debt consolidation) |
80%* | This includes credit cards, personal loans or hire purchase. This isn't allowed on shared ownership and right to buy (within the discount clawback period). We can consider Remortgages or Additional Borrowing if the applicant(s) wants to raise funds to repay unsecured debts (debt consolidation). This is subject to a maximum LTV of 80%. |
|
| Pay off second charge |
Any other equity loan (Not Help to Buy) will be classed as a second charge. This isn't allowed on shared ownership and right to buy (within the discount clawback period). |
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*Restrictions and lower LTV limits apply for some foreign nationals without indefinite leave to remain in the UK or if borrowing a large amount.
Unacceptable loan purposes
We don't accept applications for:
- Business purposes*
- Purchasing a Buy to Let
- Partially built properties
- Partially completed barn conversions
- Building plots/self-builds (where this will form Nationwide’s security)
- Let properties
*We define business purposes as:
- Injection into a new or existing business
- Repayment of any business debt
- Payment of HMRC tax bill (borrowing to pay an inheritance tax bill is acceptable)
The above list is not exhaustive but it covers the reasons most commonly seen.
Second property
Nationwide can consider lending for the following second property uses:
- Holiday homes in the UK or abroad (where the property being purchased is abroad, the loan must be secured on a property in the UK).
- Second homes due to work location (Pied a terre).
- Accommodation for wholly dependent relatives.
- A new main residence where the applicant wishes to let their existing property rather than sell it. For more information on the Let to Buy process with our subsidiary brand, visit The Mortgage Works.
Nationwide will not consider for the following second property uses:
- Capital raising against a main residence to purchase a 'buy to let' i.e. remortgage with additional borrowing, subsequent additional borrowing or raising capital against a mortgage free property.
- Properties that will be wholly let from inception.
- Properties occupied on lifetime tenancies and properties purchased or remortgaged from relative(s) with continuing occupancy may be unacceptable.
- Properties that are only likely to be suitable as holiday homes.
- Time Shares.
- Mobile Homes.
Affordability figure needs to cover all mortgages that will be outstanding at the time of completion, please also see clients with additional properties.
Where your client has, or will have on completion, only one mortgaged property, standard LTV limits will apply. Maximum 85% LTV will continue to apply if the client will own two or more mortgaged properties on completion and will be treated as a Second Property application, even if the property being purchased or remortgaged will be your client’s main residence.
For information about products please see our products, loan size and maximum LTV criteria.
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