First-time buyers searching for ways to get on the property ladder in 2025 have just received a welcome boost from NatWest. The high street bank has announced a series of major changes to its mortgage affordability rules, as well as the launch of a brand-new Family-Backed Mortgage product to help people looking for mortgages for first-time buyers. These updates are specifically designed to make mortgages more accessible for first-time buyers and to help them borrow more responsibly in today’s evolving housing market. In this blog, I will run through the new updates and provide a bit of insight into how these will impact future borrowing.
Improved Affordability Calculations to Help People Looking for Mortgages For First-Time Buyers
As of today, NatWest has revised its residential mortgage affordability calculations, allowing potential borrowers to qualify for higher loan amounts. This comes in direct response to recent guidance from the Financial Conduct Authority (FCA), encouraging lenders to adapt their affordability models to reflect falling interest rates and market changes.
Key highlights of the changes include:
- Increased borrowing potential for residential mortgage applicants, especially for first-time buyers with steady incomes and manageable outgoings.
- Individual pension contributions are now included in affordability assessments. This ensures a more personalised view of each customer’s finances and leads to fairer mortgage offers.
- Tailored affordability based on your unique financial profile, not just broad assumptions.
- This update is especially beneficial for first-time buyers with pension contributions, as their true disposable income will now be taken into account, potentially enabling them to borrow thousands more.
NatWest Launches New Family-Backed Mortgage for First-Time Buyers
In a further move to support first-time homeownership, NatWest has launched its new Family-Backed Mortgage, an innovative product that lets buyers combine their income with a family member or friend to increase their borrowing capacity.
How does the Family-Backed Mortgage work?
Take this real-world example:
A first-time buyer earning £28,000 with a 10% deposit can currently borrow up to £124,450, giving them a home-buying budget of around £138,000.
With the new Family-Backed Mortgage, the buyer can add a family member earning £45,000. This boosts borrowing power up to £246,000, creating a new property budget of approximately £273,000. Almost double the previous limit.
This product is ideal for first-time buyers with family support, helping overcome the common affordability barriers seen in high-demand areas such as London, Bristol, Manchester, and beyond.
Why Choose a NatWest Mortgage for First-Time Buyers?
Despite our advisors having access to the entire mortgage market, NatWest has, in our eyes, positioned itself as a leading mortgage lender for first-time buyers by offering:
- Up to 95% Loan-to-Value (LTV) for houses and flats.
- Acceptance of gifted deposits from family, friends, and other third parties.
- Mortgages available up to age 75 with maximum terms of 40 years.
- Consideration of multiple income streams, including second jobs and up to 100% of earnings.
- A soft credit check at the Agreement in Principle (AIP) stage.
- A detailed Affordability Calculator to help estimate borrowing power.
- The ability for first-time buyers to purchase a Buy to Let under certain criteria.
Whether you’re applying solo or using family income support, NatWest’s new offerings make it easier than ever for first-time buyers to take their first step onto the property ladder.
What Does This Mean for First-Time Buyers in 2025?
The combination of increased affordability, income flexibility, and the newly launched Family-Backed Mortgage signals a positive shift for UK first-time buyers. These updates from NatWest align with broader industry efforts to make mortgage lending more accessible, especially as interest rates begin to stabilise. For anyone exploring their first-time buyer mortgage options, this is a critical time to reassess affordability with a mortgage advisor, particularly in light of these policy changes.
Speak to an Expert at Oportfolio Mortgages
At Oportfolio Mortgages, our team of expert mortgage advisors are here to help you understand how the NatWest first-time buyer mortgage updates could benefit your home-buying journey. We’ll guide you through every step, from checking your borrowing potential to securing a mortgage tailored to your unique financial situation. Contact us today to find out how much you could borrow with NatWest’s new affordability criteria.
