NatWest has launched a new range of shared ownership mortgages, designed to make it easier for more people to take their first step onto the property ladder.
The new product allows customers to buy an initial share of between 25% and 75% of a property, while paying rent on the remainder. Borrowers can then increase their share over time through staircasing.
Initially available exclusively through mortgage brokers, the shared ownership range applies to both new purchases and remortgages, including cases where borrowers wish to staircase. The offering is not tied to a specific NatWest mortgage product and can be used with options such as the bank’s green fixed rate or up to 95% loan-to-value new build deals.
Customers will also be able to apply for additional borrowing after six months of successful repayments, although this will be limited initially to staircasing purposes.
The launch follows the introduction earlier this year of NatWest’s Family Backed Mortgage, which allows borrowers to combine their income with that of a family member or friend to increase borrowing power.
Alongside the new shared ownership range, NatWest has also announced changes to its affordability and lending criteria for new build and interest-only borrowing. From today, customers buying new build properties will be able to borrow up to 95% loan-to-value on houses and 90% on flats.
INTEREST-ONLY
For interest-only mortgages, the maximum loan-to-value has been raised from 50% to 75% when the property sale is the main repayment strategy, and to 80% when other investments are used for repayment. To qualify, applicants must earn at least £75,000 individually or £100,000 jointly.
Lloyd Cochrane, head of mortgages at NatWest Group, said: “We want as many of our customers as possible to be able to buy their own home. 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.
“We have also made improvements to our borrowing criteria meaning customers can buy a new build flat or house with a lower deposit. Together these changes mean we can help to bring the dream of home ownership within reach of more customers sooner.”
