As we enter a new decade, lenders have not taken their foot off the pedal in terms of evaluating and enhancing their lending propositions as the fight for new business continues to rumble across all sectors of the mortgage market.
Mainstream
Nationwide Building Society has reduced its stress rate on like-for-like remortgages. The society will now apply a stress rate of 1 per cent above its standard mortgage rate of 4.24 per cent, down from a previous stress rate of 3 per cent above SMR. Borrowers can add a product fee to the mortgage but can’t add early repayment charges.
Barclays has reduced rates across its residential range. New rates include a two-year fix at 2.80 per cent up to 95 per cent LTV with no product fee, and a seven-year fix at 1.84 per cent up to 60 per cent LTV with a £999 fee.
Building Societies
The Melton Building Society has entered the Help to Buy market with two mortgages for both purchase and remortgage, including staircasing. For HTB homeowners coming to the end of their interest-free period, the Melton will consider an equity loan remortgage, a capital raising remortgage, or a remortgage to fully repay the equity loan.
Principality Building Society has added six new cashback deals to its residential mortgage range. New cashback products include two and five-year deals from 2.15 per cent up to 80 pre cent LTV which include £500 cashback. Cashback is now available on 22 residential mortgages, ranging from £200 to £1,000.
Buy-to-let
Staying with the building society theme, Hanley Economic Building Society has introduced a new ex-pat offering into its BTL mortgage range. The society’s first venture into this growing part of the BTL market comprises a 3.49 per cent variable discount product at a maximum 80 per cent LTV.
In terms of specific criteria, rental income must be received in sterling and achieve an interest cover ratio of 145 per cent at Hanley’s stressed interest rate. Mortgage payments must be made in sterling from a UK bank account and all applicants must be able to provide satisfactory evidence of their identity, overseas address and UK bank account. The property cannot be occupied by the borrowers’ family and no applications will be accepted from portfolio landlords.
Pepper Money has overhauled its entire range with a number of enhancements and new products, including the launch of limited company BTL products. The lender has also introduced free valuations on its standard BTL range, reducing rates on its Pepper 48, Pepper 36 and Pepper 24 products and changing the required rental calculation on two-year fixed rates to the higher of the initial rate plus 2 per cent or 5.5 per cent.
Last but not least, Foundation Home Loans has announced a series of criteria enhancements across its BTL product range including changes to its interest coverage ratios and maximum loan sizes.
Specialist lending
Staying on the topic of specialist lending, United Trust Bank has announced that it will now offer bridging products in Scotland. Prior to this development, the bank’s bridging offerings were only available in England and Wales.
Switching the focus to later life lending, Pure Retirement has announced a series of criteria enhancements to its Heritage range and Canada Life has reduced rates across its Lifestyle Options lifetime mortgage range.
This raft of criteria and product changes highlight how lenders have really hit the ground running in 2020 and shown little sign of any festive hangover. And there is certainly heightened activity in the pipeline for the rest of Q1, especially with interest rate speculation mounting.
Nicola Firth, chief executive, Knowledge Bank
