Yes, you read it right. Nationwide have released (very quietly) a new 125% mortgage product amongst its other new releases recently.
With the amount of debt management cases rising, and other debt solutions such as IVA's and bankruptcy also looking gloomy, why would Nationwide announce a product that now seems so taboo? Well, it seems that they are trying to tap into an ever growing market of consumers in negative equity.
If you find yourself in negative equity, the usual advice is to stay put and ride out storm, and seek debt help if you need to. For some though, this may not be feasible, and this could be where Nationwide's new mortgage could come in.
The new mortgage is only available to Nationwide customers, and only available to those who can afford the payments. They can take a new loan of up to 95% of the property, and carry over up to 25% to cover the loss on the drop in value of their old one. It is likely that the payments for the extra 25% will be quite high.
While this may not be suitable for many consumers on debt management plans, it does show that some lenders are trying to include other consumers, such as those in negative equity.
For debt advice call MRA Debt Help on 01424 777156, where one of our debt counsellors will be able to offer the best debt solution for you
The cost of the negative equity part of the mortgage is expensive at nearly 8% for the 5yr fixed rate deal.