The building society, based in Newcastle Upon Tyne, announced yesterday that they would be making a triumphant return to the lending market with two new exclusive large mortgage loan products. The announcement comes only a month after the building society pulled all of its mortgage deals following the dramatic changes to interest rates.
After the disastrous mini budget was announced by former chancellor Kwasi Kwarteng and former prime minister Liz Truss, which saw large tax cuts that in turn caused the Bank of England to hike up interest rates, a lot of mortgage lenders either increased their rates tenfold or completely dropped out of the market. The Newcastle building society was one of these lenders. The relatively small society (compared to the likes of NatWest and Santander) did not hide the fact that the sharp jump in rates took them by surprise and they completely removed themselves from lending, giving them time to re-group and adjust the products and rates that they offered.
Well, this re-grouping seems to have worked out well for the Newcastle as they have announced a return to the market with a welcomed range of new products. Most notably two products that are aimed a large lending, something that we as London mortgage brokers are very involved in. So, let’s take a look at the products on offer.
What Are The Large Mortgage Loan Products?
The society have released two new products for large loans, a 2-year fixed product and a 5-year fixed product. Each product is available for mortgages between £1.5 Million and £2 Million. Now, the rates are not low but compared to the rest of the market are pretty on-par and considering the size of the loans, these products are a positive opening up of the market.
The 2-year fixed product comes at a rate of 6.45% and the 5-year fixed product comes at a rate of 6.65%. The maximum loan to value (LTV) for each is 65% meaning that with a 35% minimum deposit, you can have access to either product for large loan lending. The 2-year product comes with early repayment charges of 2% until the 31st of January 2024 and 1% until the 31st of January 2025. The 5-year product comes with early repayment charges of 5% until the 31/01/2028. Each product also comes with a completion fee of £1,499.
As well as introducing these new products for higher mortgage loans, the lender has also announced that an increase income multiple can be applied to the affordability. These loans can potentially be calculated at 5.5X income rather than the industry standard of 4.5X. That means that for a £2 Million lend, you would potentially need to earn around £363,600 either in sole name or jointly, compared to regular lending which would need to see an earning of at least £444,500. The products can also include 100% or earned bonus and commission income for those individuals whose income is heavily commission or bonus based.
What Have Newcastle Building Society Said?
Head of intermediary lending at the Newcastle Franco Di Pietro has commented:
“We have updated our large loan product portfolio in line with the current rate environment and are pleased to be able to reintroduce the range to market reflecting our continued commitment to supporting our intermediary partners and their clients.”
If you or anyone you know is looking for a large mortgage loan, we are specialist in high net worth and large mortgage lending. Please feel free to get in touch with our specialist and experienced mortgage advisors today to see how we can get you the best deal on the market.