Best Mortgage Direct – 0845 194 7102

The Nationwide Building Society, One of  Britain’s biggest building societys, have become the first mortgage lender to re-introduce mortgages worth up to 95% of a property’s value.

But the mortgage rates, which are only available to existing customers who are moving home, come at a really high price. Borrowers wanting a fixed rate mortgage will have to pay 7.18%, (5.18% above the Bank of England base rate). The Nationwide offers homeowners with a 40 per cent deposit a similar deal at 5.38 per cent, a difference of £225 a month on a £150,000 interest only mortgage.

However the Nationwide unveiled new tracker deals yesterday. A new two year tracker for customers with 5% equity costs 5.49%, 3.49% above base rate. Nationwide’s best tracker deal for customers with a 40% deposit is 4.49 per cent, 2.49% above base. This is also almost double the rate of its previous 95% loan-to-value (LTV) tracker deal, which was available in August, at 1.78% above base.

Our spokesperson stated These mortgage deals are expensive but lenders are now pricing for risk. Re entering the 95% market is a very bold move and it will help Nationwides customers who desperately need to move house but couldn’t find the finance. However, it is first time buyers who would benefit most but they have been excluded.

At the start of the year there were almost 900 mortgage deals on the market for borrowers with a 5% deposit or equity stake in their home, The number of deals requiring a 40% has increased from 10 at the beginning of the year to 149 today.