Nationwide back with 125% mortgages
9 July 2009 By MoneyhighStreet Staff Leave a Comment
Negative equity is an issue for many people wanting to move house so to help the Nationwide Building Society has introduced 125% mortgages.
Whilst 125% mortgages have been frowned upon by many as causing many debt issues, the offer from Nationwide doesn’t automatically mean that 125% of the value of the home will be lent.
Firstly the offer is only open to existing Nationwide customers.
The new product is constructed as
- a loan of 95% of the value of the new house, fixed for 3 or 5 years
- an amount for negative equity from the old house, up to 30% of the value of the new house, added on at a higher interest rate.
The maximum overall lending is 125% of the value of the new house.
It seems a very good move by Nationwide.
Negative equity can be a real issue and make it impossible for some people to move.
The Bank of England estimates around 1 million people are now in a negative equity situation.
Hopefully some of those who are looking to move will now be able to benefit from this 125% mortgage deal from Nationwide.
