From The BBC:
The Nationwide Building Society has introduced a mortgage allowing borrowers to take loans worth 125% of the value of the home they are buying.It will only be available to existing customers in negative equity who want to move house. Negative equity means that the value of someone’s home is less than the amount they owe on their mortgage. Nationwide said the deal was a very “niche offer” and that not everyone in negative equity would qualify. The Financial Services Authority is considering limiting mortgage loans to 100% of a property’s value. ‘No more risk’The Nationwide only offers new customers mortgages worth 85% of the value of the home they want to buy.
Under its new arrangement, existing borrowers would take out a loan for 95% of the value of their new house at a fixed rate of 6.73% for three years or 7.48% for five years. They would have to put down a 5% deposit from their own funds. They would then be able to add on the negative equity from their old home, up to another 25% o…
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