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Nationwide brings back the 95% mortgage

The Nationwide building society has put itself in the firing line of regulators and the government after announcing the reintroduction of mortgages worth up to 95% of a property's value. However, those looking for a 95% mortgage will certainly pay the price with a rate of 7.18% quoted against UK base rates of just 2%. The rate does decrease depending upon the amount of funding which buys are able to put down as a deposit but the reintroduction of the 95% mortgage has alarmed many.

Many observers are mystified how massive institutions such as the Nationwide can introduce 95% mortgages which are well over the base rate but struggle to increase liquidity at the more popular end of the market. As house prices continue to fall there is concern that those able to take on a 95% mortgage today could find themselves in negative equity in a relatively short space of time.

The UK mortgage industry is still nowhere near as liquid as it was only a few months ago and there are serious concerns that the banking industry is unwilling or unable to assist in the short term. Indeed calls for further state funding have been doing around sometime to the concern of many.

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