Approximately £1.1 billion has so far been loaned to both first time buyers and home movers who have saved towards a mortgage deposit for at least six months through a Save to Buy Savings Account or ISA. They are then able to apply for a home loan with just a 5% deposit.
More than 90,000 Save to Buy accounts have been opened since the launch of Save to Buy in May 2011, with the current average savings or ISA account balance being £5,714.
Save to Buy was originally launched four years ago to help first time buyers, but in January 2013 Nationwide widened the scheme to include home movers as well.
The average loan size for Save to Buy mortgage applicants since launch, of which the majority are first time buyers, is £145,000, and the average deposit is £13,900.
On average, Save to Buy first time buyers are aged 30, while home movers are 32. Three quarters of Save to Buy mortgage applications are made in joint names.
Andrew Baddeley-Chappell, Nationwide’s Head of Policy for Mortgages and Savings, said:
“At a time when the industry is developing plans to launch the Help to Buy ISA, Nationwide’s Save to Buy is providing a successful means for many customers to begin, or complete, the journey towards a home of their own. Over four years, we have helped many thousands of customers aiming to move onto or up the housing ladder to achieve their aspiration.
“Many people do not have the bank of mum and dad to depend upon. We have focussed our support on those who prudently plan ahead, save regularly and think about what they might need to apply successfully for a mortgage before finding a home. Save to Buy helps mortgage applicants demonstrate good saving habits, money management and planning. Through this approach, we have helped our customers to help themselves to access low deposit mortgages and cashbacks to help with the costs of moving home.
“Save to Buy helps Nationwide mortgage applicants to demonstrate how good saving habits and strong credit quality go hand in hand.”
The most popular choice of mortgage taken out by Save to Buy customers has been a Nationwide four year Flexclusive fixed rate mortgage, with an average deposit of 8%. Two thirds of all Save to Buy loans are made at up between 90 and 95% loan to value.
With Save to Buy, savings accounts can be opened with a minimum of £50, with customers saving at least £50 per month for six months or more. First time buyers and home movers are then eligible to apply for a Nationwide fixed rate mortgage. If the customer goes on to take a Save to Buy mortgage, depending on how much they save, there is also a cashback reward of up to £1,000.
