Nationwide launches 125% mortgage

Mortgage provider Nationwide has launched a new 125 per cent home loan product in a bid to help customers struggling with negative equity.

The deal is only available to the bank's existing customers who want to move house but are being prevented from doing so as the value of their own home has declined.

Nationwide has stressed that its loan is very different to the 100 per cent mortgages offered by banks prior to the credit crunch, many of which people have defaulted on.

"We will be making very certain people will be able to afford the loan," said a spokesperson for the bank.

New customers can only get an 85 per cent mortgage from Nationwide.

The move has attracted varied responses, with financial planner Jonathan Davis, of Armstrong Davis, telling the BBC it is a "joke" and Ray Boulger at mortgage broker John Charcol saying it is "really consumer friendly".

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2009-07-09 13:10:19 © Moneyextra.com