Ipswich Building Society launches products for mortgage prisoners
Ipswich Building Society has launched six mortgage products aimed at mortgage prisoners.
These are borrowers who are unable to access the wider mortgage market following industry-wide affordability stress tests introduced in 2014. The six remortgage products provide like-for-like solutions for residential, later life, and shared ownership applicants.
The society’s like-for-like mortgage range utilises existing regulation to offer a lower affordability assessment on application, calculated at product pay rate only and not at a stressed rate.
Richard Norrington, chief executive at Ipswich Building Society, said: “Back in 2014, we were among the first lenders to actively use the FCA’s new Mortgage Market Review transitional arrangements regulation introduced to enable homeowners to switch to a new provider.
“Whilst the FCA is currently consulting on changes to mortgage assessment criteria, responsible lending rules will not come into effect until the end of the year and are partly targeted at helping mortgage prisoners.
“We recognise that there is also a tranche of homeowners who currently find themselves unable to remortgage away from their current lender due to changes in affordability assessment processes, and who cannot wait for the new legislation.
“That’s why we’ve developed and introduced our new like-for-like remortgage range, to provide greater opportunity for these borrowers.”
This is available for mortgage holders who would benefit from this more flexible approach to the affordability assessment which is made possible under the current rules.
Applicants must have been with their lender for two years or more, be up to date with their repayments, and must not be borrowing additional funds.
The society has introduced six remortgage products providing like-for-like solutions for residential, later life, and shared ownership applicants:
The residential range is up to 80% loan-to-value (LTV). There’s a 2-year discount rate at the society’s standard variable rate, giving a current pay rate of 2.55% for two years from the completion date, and there’s a 2-year fixed rate at 2.80%.
For both products an application fee of £199, completion fee of £800 and CHAPS fee of £35 applies.
The society’s later life range is for applicants 50 plus and is up to 70% LTV.
There’s a 2-year discount rate at the society’s SVR, giving a current pay rate of 2.50% for two years from the completion date and a 2-year fixed rate at 2.75%.
For both products an application fee of £199, completion fee of £500 and CHAPS fee of £35 applies.
For Shared Ownership up to 90% of the share there’s a 2-year fix at 3.2%, an exclusive2-year fixed rate at 3.15%. Both products have no application fee, completion fee, or CHAPs fee.
Loans are available from five to 40-year terms, up to a maximum loan of £750,000 for residential and later life options, and a maximum of £500,000 for shared ownership. All remortgage applicants benefit from a free valuation up to a maximum property value of £1m and fee assisted legals.
Norrington added: “By applying our manual underwriting approach, we are able to understand the personal circumstances behind each individual mortgage application.
“This, coupled with our entrance into the like-for-like mortgage market, will enable us to provide greater opportunity for borrowers who find themselves with restricted access to other mortgage products due to guideline changes and the introduction of stress testing.”