The practice of allowing first-time home buyers to put down a deposit of as little as 5% appears to be nearing an end as mortgage lenders take further steps to tighten lending requirements amid the credit crisis. Financial Times, Daily Telegraph, The Independent
Nationwide yesterday became the latest lender to require new borrowers to put down a deposit of at least 10% of the value of a property for most of its fixed- and variable-rate mortgage products, beginning on 1 May. Britain’s biggest building society also moved to further restrict the maximum amount it will lend first-time buyers to £500,000 from the £1m it had set as a requirement just over two weeks ago.
Nationwide customers with existing mortgages, however, will be permitted to continue to take out home loans with a deposit of 5%. And new borrowers who take on either Nationwide’s three-year fixed or tracker-rate products will also be exempt.
