- For Many in US, It Will Be a Scaled-Down Holiday Season
- Judge Erases Couple's $525,000 Mortgage Payment
- Where Do Pardoned Turkeys Go?
- Foreign Demand Boosts US 7-Year Treasury Sale
- New-Home Sales Jump to Highest Level in Over Year
- Consumers Catching the Holiday Spirit
- Jobless Claims Below 500,000, Durable Orders Slip
- Activision Prepares to Double Dip on ‘Modern Warfare 2’
- Garlic Price Rises Surpass Gold, Stocks in China
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
- S&P Stocks Trading at New 52-Week Highs
- 4 Food Stocks to Stuff in Your Portfolio: Analyst
- S&P at 1050-1200 Trading Range Next Year: Strategist
- Treasury On Mortgage Modifications
MOST SHARED
- Ritz-Carlton ?Struggling? in the US: President
- Garlic Price Rises Surpass Gold, Stocks in China
- New-Home Sales Jump 6.2% To Highest Level in Over Year
- S&P Stocks Trading at New 52-Week Highs
- Half of Banks' Losses May Still Be Hidden: IMF Head
- Oil Price to Average $75.40 in 2010: Poll
- Americans Ditch Planes for Trains this Thanksgiving
- Jobless Claims Below 500,000, Durable Orders Slip
- Consumer Mood Improves, But Anxiety Over Personal Finances
- A Facebook Christmas
UK building society Nationwide is offering 125 percent mortgages to its existing customers that have fallen into negative equity and need to move home.
The mortgage lender insists the move does not signal a return to the risky bank lending which caused the subprime crisis, even though the new loans would be worth far more than the value of the homes they use as collateral.
“Nationwide is a responsible lender and our negative equity policy is an appropriate and prudent response to market conditions and demonstrates our continued commitment to supporting our customers,” Andy McQueen, director of mortgages at Nationwide, said.
The underwater customers would be able to carry over their negative-equity loan when they move home, but only customers that meet Nationwide’s “strict lending criteria” and have a good credit record will be accepted, the lender said in a statement.
Nationwide, which has not advertised widely its offer, said it does not anticipate high levels of demand for the service and hasn’t seen much pickup since the product’s launch in June.
![]() |
Under the new scheme, customers will be able to replace their existing mortgage with a new loan of up to 95 percent of the property. But an additional 25 percent of the loss incurred from their existing property would also be tacked on, pushing the loan over the 100-percent mark.
Borrowers would need to stump up a 5 percent deposit to secure the new mortgage.
The interest rates available on the main loan match those available to customers whose mortgages are not under water and who are moving home with a 95 percent loan-to-value ration, Nationwide said.
Both the main loan and the associated negative equity top-up are restricted to three and five year fixed rate products, Nationwide said. Rates for the top-up loan covering 100-125 percent loan-to-value are 7.23 percent for the three-year fixed rate products, and 7.89 percent for the five-year products.
The deal could offer a lifeline to homeowners who could find themselves stuck in their current property because they are unable to sell it without incurring a huge loss, but it is unclear whether other mortgage lenders will following Nationwide’s suit.
- For nearly three decades, these on-call experts have been dishing advice on how to – and not to – cook turkey.
- Eric Schmidt pledges to create a virtual copy of the Iraq National Museum at Google’s expense.
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
- How can you get out of debt and back on the road to recovery? Follow these ten steps.













