New Build Mortgage Affordability Changes Announced By Accord
Accord mortgages, perhaps a somewhat lesser known UK mortgage lender, has today announced some very interesting New Build mortgage affordability criteria. If you are in the market for purchasing a new build residential home, then this new update will be right up your street! Over the last couple of years there has been little help for people purchasing new build properties, but products like this from Accord and other newly introduced new build purchase schemes are a metaphorical olive branch. In this article I will explore the new changes to mortgage affordability criteria announced by Accord, and also how a specialist new build mortgage advisor can help.
New Build Mortgage Affordability Changes From Accord Mortgages
It is no secret that getting a mortgage can be difficult. The largest stumbling block often being the mortgage affordability, or simply put, not be able to borrow a large enough mortgage to purchase a property. On standard residential properties, many lenders will will allow as little as 5% deposit, and are much more generous with the amount they are willing to lend. Their mortgage rates are also often much more competitive.
New build properties are a different story. Because the properties are brand new, many lenders are cautious of ;lending on them…much more cautious than on properties that have been around for a while. Many lenders will cap the minimum deposit allowance at 15% or 20%, and many will charge higher interest rates on specific new build products. Previously, there were schemes such as the Help to Buy scheme, which was designed to specifically help people purchasing new build properties by reducing the loan amount and deposit amount required. This scheme came to an end in 2023.
Increased Loan To Income And Reduced Deposit Requirement
In a communication to brokers this morning, Accord Mortgages announced that they were making some significant changes to their new build property purchase criteria. Aimed at making new build property purchases easier for residential buyers. Here are the changes announced:
- Reducing the minimum household income threshold for lending above 4.49x LTI (up to 5x LTI) to £50,000 (from £60,000), for LTVs up to 90%.
What does this mean? It means that if you earn £50,000 a year, you can now potentially borrow over 4.49 times your income as a mortgage (usually between 5X and 5.5X income maximum. This has decreased from the previous required minimum income of £60,000 per annum.
- Increasing their new build LTV to 90% (from 85%) for above 4.49x LTI (up to 5x LTI) where the household income is £50,000 and above.
This criteria change means that where someone earns £50,000 or more a year, and wants to borrow 4.49X income or more, you can now put down a minimum of 10% deposit, a decrease from 15% deposit requirements previously.
Speak To A New Build Specialist Mortgage Advisor
When it comes to buying a new build property, there are lots of niches and quirks that need to be considered, and going it alone without expert advice is not the best idea! Call or message our team of expert mortgage advisors today to start your journey into new build home ownership. We are here to help.
