Broker channel to have exclusive access at launch
NatWest has unveiled a new shared ownership mortgage product, offering customers the opportunity to purchase a portion of their home while paying rent on the remainder.
The lender will permit borrowing for shares starting from 25%, with the option for customers to increase their ownership over time through staircasing. The shared ownership mortgages will be available for both new purchases and remortgages.
Initially, the product will be accessible exclusively through mortgage brokers.
The development follows the recent introduction of NatWest’s Family Backed Mortgage, which enables applicants to combine their income with that of a family member or friend to increase their borrowing capacity.
The shared ownership offering is not tied to a specific NatWest product and can be used with mortgages such as up to 95% loan-to-value (LTV) on new builds or the green fixed rate option. Customers will also be able to apply for additional borrowing after six successful mortgage payments, though this will be limited to staircasing purposes at launch.
“We want as many of our customers as possible to be able to buy their own home,” said Lloyd Cochrane (pictured right), head of mortgages at NatWest Group. “Today’s launch of shared ownership mortgages means we are bringing more choice for customers who are thinking about the ways in which they can get on the housing ladder.”
Alongside the new product, NatWest has announced changes to its lending criteria for new build and interest-only mortgages. From today, borrowers purchasing new build flats may access up to 90% LTV, while those buying houses can borrow up to 95% LTV.
For interest-only mortgages, the maximum LTV will rise from 50% to 75% where the main repayment strategy is the sale of the property, and from 75% to 80% where other investments are used as the repayment strategy. Eligibility for interest-only borrowing requires a minimum individual income of £75,000 or £100,000 for joint applicants.
“We have made improvements to our borrowing criteria meaning customers can buy a new build flat or house with a lower deposit,” Cochrane said. “Together, these changes mean we can help to bring the dream of home ownership within reach of more customers sooner.”
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