Nationwide Raises Minimum Income Level for Helping Hands Mortgages to £40,000

22nd January 2025

Nationwide Building Society is changing its rules for Helping Hand mortgages.

Starting now, borrowers need to earn at least £40,000 a year, up from the previous requirement of £35,000. This increase is intended to ensure that people can afford their loans and to follow government and regulatory guidelines for responsible lending.

Helping Hand mortgages allow borrowers to take out loans up to six times their income, making them higher-risk. By raising the minimum income requirement, Nationwide aims to reduce the chance of borrowers defaulting on their loans. However, this change may make it more difficult for first-time buyers, particularly in expensive areas, to qualify for these mortgages.

Nationwide Lending Criteria

When you're in the market for a new mortgage, there are several key factors to keep in mind:

Interest Rates: Look for competitive interest rates. Even a small difference in interest rates can have a big impact on your monthly payments and the total amount you repay over the life of the loan.

Fees and Closing Costs: Be aware of any additional fees or closing costs associated with the mortgage. These can add up and should be factored into your budget.

Type of Mortgage: Decide between a fixed-rate mortgage, where the interest rate stays the same, or an adjustable-rate mortgage (ARM), where the rate can change over time. Each has its pros and cons depending on your financial situation and future plans.

Loan Term: Choose the term of the mortgage, typically 15, 20, or 30 years. A shorter term means higher monthly payments but less interest paid over the life of the loan. A longer term means lower monthly payments but more interest paid overall.

Down Payment: Consider how much you can afford to put down as a down payment. A larger down payment can reduce the amount you need to borrow and may help you secure a better interest rate.

Lender Reputation: Research potential lenders to ensure they are reputable and have good customer service. Reading reviews and seeking recommendations can be helpful.

Pre-Approval: Getting pre-approved for a mortgage can give you a better idea of how much you can afford and show sellers that you're a serious buyer.

Your Credit Score: Your credit score will impact the interest rate you're offered. Make sure your credit report is accurate and try to improve your score if needed before applying.

Monthly Budget: Consider how the monthly mortgage payments will fit into your overall budget. Make sure you can comfortably afford the payments along with other living expenses.

Future Plans: Think about how long you plan to stay in the home. If you expect to move within a few years, an ARM might be more beneficial, but if you plan to stay long-term, a fixed-rate mortgage might be a better choice.

How to get a better credit score
Improving your credit score can take time and effort, but it can make a significant difference in your financial life. Here are some steps you can take:

Check Your Credit Report: Start by getting a copy of your credit report from the major credit bureaus (Experian, Equifax, and TransUnion). Review it for any errors or inaccuracies and dispute any incorrect information.

Pay Your Bills on Time: Payment history is a major factor in your credit score. Make sure to pay all your bills on time, every time. Consider setting up automatic payments or reminders to help you stay on track.

Reduce Outstanding Debt: Try to pay down any outstanding debt, especially high-interest credit card balances. Focus on paying off your debts with the highest interest rates first.

Limit New Credit Applications: Each time you apply for new credit, it results in a hard inquiry on your credit report, which can lower your score. Try to limit the number of new credit applications you make.

Maintain a Low Credit Utilization Ratio: Aim to use less than 30% of your available credit limit. If you have a high balance on your credit cards, try to pay it down to keep your utilization ratio low.

Keep Old Accounts Open: The length of your credit history also impacts your score. If you have old credit accounts that you're not using, consider keeping them open to maintain a longer credit history.

Diversify Your Credit Mix: Having a mix of different types of credit (e.g., credit cards, installment loans, mortgages) can be beneficial for your score. However, don't take on new debt just to diversify your credit mix.

Become an Authorized User: If a family member or friend has a credit card with a good payment history and low balance, ask if they're willing to add you as an authorized user. Their positive credit history can help boost your score.

Use a Secured Credit Card: If you have a low credit score, consider getting a secured credit card. These cards require a deposit, but they can help you build or rebuild your credit if you use them responsibly.

Seek Professional Advice: If you're struggling with debt or credit issues, consider speaking with a credit counsellor or financial advisor. They can provide personalized advice and help you develop a plan to improve your credit.