This week, and specifically in the last couple of days, we have seen a lot of mortgage lender changes being announced. Changes around mortgage interest rate increases, mortgage interest rate decreases, product withdrawals, product introductions, and changes to lender mortgage criteria. As part of the PRIMIS mortgage network, Oportfolio mortgages in London has access to over 90 different mortgage lenders and thousands of available products. That’s why we always make sure that we are up to date with lender offerings, so that we can provide our clients with the most relevant information. Here is a breakdown of some changes that have been announced today alone:
Nationwide Mortgage Lender Changes – Self-Employed Mortgages
Nationwide building society have announced in a brief email communication to brokers that they will be making changes to their self-employed mortgage affordability. Nationwide have said that they will now lend up to 4.49x loan-to-income (LTI) for self-employed clients remortgaging or purchasing a new property. That means that self-employed people can now borrow up to 4.49X their income as a mortgage, subject to a full mortgage affordability assessment.
General mortgage lending criteria dictates that self employed income will normally be determined from an average of 2 or 3 years income figures after tax. S, if someone earned £50,000 last year after tax and £61,000 this year after tax, a lot of lenders would consider their income to be £55,500. With the new changes to nationwide mortgage affordability, this borrower could potentially get up to £249,195 as a mortgage.
Buy-to-let New Business Products From Accord Mortgages
Despite what you might hear on the grapevine, buy-to-let property and buy-to-let mortgages are still very popular, and more and more lenders are accommodating for landlords looking to take out new property finance. One of these lenders is Accord mortgages, who have today revealed that they will be introducing some new buy-to-let products at 80% LTV (20% deposit mortgage). From Friday the 28th of April, Accord Mortgages will be offering:
The new products available are:
- 2 Year Bank of England Tracker – Bank of England Base Rate + 1.25%
What does this mean exactly? This is a product that does not have a fixed interest rate and instead tracks the Bank of England base rate which (at the time of writing this post) is at 4.25%. So, the current interest rate would be 4.25% + 1.25% = 5.5%. Someone mortgaging a buy-to-let property valued at £250,000 on interest only over 25 years with a 20% deposit on this product would pay £917 a month. If the base rate increases, so will the overall rate of the product. For example, if the base rate rises to 4.75%, the overall rate would be 6% or £1,000 a month.
- 2 Year Fixed Rate – 5.39%
This means that a borrower can fix their mortgage product at a rate of 5.39% for 2 years. Using the same figures as above, the payment would be £898 a month.
- 5 Year Fixed Rate – 5.29%.
This means that a borrower can fix their mortgage product at a rate of 5.29% for 5 years. Using the same figures as above, the payment would be £882 a month.
All of the above come with:
- £995 product fee
- Free Valuation
- Cashback or re-mortgage legal services incentives.
Speak To a Mortgage Professional About Mortgage Lender Changes
If you want to know more about the changes to mortgage lending happening at the moment, the best thing to do is to set up a phone call or meeting with one of our mortgage advisors. Give our team a call today to see how we can help.