- NatWest also announce new affordability stress rates in additional boost to all mortgage customers, including first-time buyers.
NatWest today announces the launch of the Family-Backed Mortgage, designed to help first-time buyers get on the property ladder sooner.
This new mortgage allows eligible customers to apply for a joint mortgage with a family member or friend, while still buying the property in their own name.
The NatWest Family-Backed Mortgage, also known as a Joint Borrower Sole Proprietor (JBSP) Mortgage, aims to boost the amount a customer can borrow by combining their income and the income of a family member or friend.
For example, a first-time buyer earning a £28,000 salary with a 10% deposit can borrow up to £124,450 through NatWest’s existing mortgage products. This example first-time buyer would have a budget ceiling of approximately £138,000 when looking to buy their first home.
With the new NatWest Family-Backed Mortgage however, this first-time buyer could add a family member or friend to the mortgage. For example, where the family member or friend earns £45,000, this arrangement would instantly increase the First Time Buyer’s maximum borrowing potential to £246,000, giving them a property budget of approximately £273,000.
The family member or friend who is added to the Family Backed Mortgage will be required to obtain independent legal advice before entering into the agreement.
In addition to this innovative new product, NatWest has also announced changes to its affordability rates for all mortgage customers, in a further boost to prospective buyers.
As a responsible lender, NatWest wants to ensure customers have confidence that they can afford their mortgage over the long term. As such, the change in stress rates means a typical family will be able to borrow up to £33,000 more, whilst still applying long-term stress rates to guard against future interest rate rises.
Barry Connolly, Managing Director of Homebuying at NatWest, said: “We are committed to providing more pathways to home ownership and helping first-time buyers to achieve their goals.
Today’s launch of the Family-Backed Mortgage boosts the borrowing power of prospective homeowners by enabling them to combine incomes with a family member or friend, while retaining independence to own a home in their own name.
In addition, we also announce that we have revised our affordability rates for mortgage customers, boosting the borrowing potential of hundreds of thousands of potential homeowners, whilst continuing to ensure that they can afford their mortgage over the long term.
We believe that this twin announcement can help instil hope amongst our customers that their dreams can be realised.”
NatWest also offers mortgages of up to 95% Loan-to-Value (LTV) to eligible customers and accepts deposits and gifts from immediate family, treating them as if they were the customer's own deposit.
This mortgage is not available to be used alongside schemes such as Right to Buy and Shared Equity. Standard mortgage policy rules apply, including a maximum age of 75. The main applicant must have a minimum income of £20,000 gross per annum.
For more information, visit the NatWest Mortgage hub at www.natwest.com/mortgages
You can also visit the Royal Bank of Scotland Mortgage hub for information at https://www.rbs.co.uk/mortgages
For further information contact
Ryan Sketchley
Head of Media Relations
ryan.sketchley@natwest.com
07889559186
