Nationwide for Intermediaries has announced that from tomorrow it will no longer use its income multiplier tool as part of its assessment of a borrower’s affordability.
Instead, it will be taking a more personalised approach and introducing a new calculation which will vary from case to case depending on the client’s individual circumstances.
The system will take the net disposable income, apply further deductions for household costs, and use a calculation that will also take account of factors such as LTV.
It will no longer allow payment holidays and borrow back features on any new Nationwide products reserved from March 4.
Borrowers will still be able to overpay and subsequently underpay, as well as extend the mortgage term to reduce payments if their repayment type is capital and interest.
They will also be able to convert to interest only, as long as a acceptable repayment vehicle is in place.
Nationwide for Intermediaries is also renaming its reservation fee to product fee, which it says is designed to help distinguish the fees when using product sourcing systems.
A spokesman for Nationwide, says: “We have always been a cautious lender where we assess what an individual can afford to repay and we are continuing to be prudent. Our calculation now takes an even more personalised approach to assessing the amount we will lend.”
