Nationwide Building Society, the U.K.'s largest customer-owned lender, is offering 125% loan-to-value mortgages to customers whose borrowings exceed the value of their home.

Existing customers of Nationwide who have negative equity may borrow up to 95% of the value of a property, along with 25% of the loss on an existing home, Rachel Jensen, a spokeswoman for the Swindon, England, company, said in a telephone interview Thursday.

Customers will still need a 5% deposit, she said.

"We are not relaxing our lending criteria in any way," Jensen said. "We still do the normal checks to make sure they can repay the loan."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.