Nationwide Building Society equity release review

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Nationwide Building Society is the largest UK-based building society. It offers a huge range of financial products for its members.

In this guide, we’ll take a look at the mortgage products available to those approaching later life.

What equity release products are on offer?

Nationwide offers a lifetime mortgage for those who are looking to release equity from their home.

This is essentially a loan, received as a lump sum, secured against your existing property, but there is no obligation to make repayments until you die or move into long-term care.

How does it work?

You apply for a lifetime mortgage through a financial adviser.

Your interest rate and the maximum amount that Nationwide can lend you will mostly depend on your age and the value of your property.

Once you accept the offer and the lump sum is transferred to you, interest on the loan begins to accumulate. The amount you owe begins to add up pretty quickly, especially when you’re not making any repayments on the loan.

You can make early repayments on the loan if you wish. In fact, you can pay back up to 10% of the original advance per year without facing an early repayment charge (ERC). The charge will be significant if you choose to pay back more than this though.

Once the homeowner (or both homeowners if you’re joint applicants) dies or moves into long-term care, the loan is paid back to Nationwide out of their estate.

Nationwide pays £1,000 cashback to all lifetime mortgage customers, plus there are no arrangement fees, adviser fees or valuation fees to pay.

Is Nationwide Building Society equity release safe?

Lifetime mortgages are regulated by the FCA, and you’ll need to hire a financial adviser to help you get one.

Although your interest adds up pretty quickly, these mortgages come with a “no negative equity” guarantee, so you’ll never owe more than the total value of your property.

Eligibility criteria

• You have to be aged between 55 to 85 (or 95 if you’re an existing Nationwide mortgage customer).
• A lifetime mortgage can only be secured against your main residence.
• Your property must be based in England, Wales or mainland Scotland (excluding Isle of Man, Scilly Isles or the Channel Islands).

How to apply

You can begin your application by calling 0800 146 100. You’ll initially be guided through an eligibility and affordability check, before teaming up with one of Nationwide’s Later Life mortgage consultants to complete your application.

Pros and cons

What are the alternatives to a Nationwide lifetime mortgage?

Nationwide also offers these two mortgages to older homeowners.

• Retirement Interest Only Mortgage. With this loan, you’ll pay interest every month, and pay off the capital once you die or move into long-term care.
• Retirement Capital and Interest Mortgage. This is essentially a standard repayment mortgage for older homeowners. You can apply right up until your 85th birthday (or your 95th birthday if you’re an existing Nationwide mortgage holder). Naturally, the affordability checks are likely to be stricter on this product.

Nationwide customer reviews

Customers in Finder’s 2021 customer satisfaction survey were highly positive about Nationwide. It received a rating of 5 stars out of 5, and were named the winner in Finder’s 2021 customer satisfaction awards for mortgages. 88% of Nationwide customers also said they would recommend the brand to a friend.

Our verdict

Nationwide is one of the most reputable mortgage lenders in the UK, although its lifetime mortgage isn’t as flexible as others on the market.

Frequently asked questions

• Why do I need to use a financial adviser to get a lifetime mortgage?

  The FCA determines that all lifetime mortgage applications must be completed with the help of a financial adviser. This is because a lifetime mortgage will have a significant impact on the inheritance you leave to your beneficiaries.

  In many cases, they’ll owe the entire value of their home to the mortgage lender. As such, it’s extremely important that the applicant chooses the best product for them and fully understands the consequences before agreeing to this loan.

• What happens after the death of the homeowner(s)?

  The loan and interest will be repaid back to Nationwide Building Society from the estate of the homeowner(s).

• Is it possible to pay off my mortgage early?

  Yes, but you may face a significant early repayment charge if you pay more than 10% of your original advance per year.

• Are there any other fees I need to be aware of?

  You’ll need to pay legal fees to your solicitor in order to finalise your lifetime mortgage. Your £1,000 cashback from Nationwide will help to cover these fees.