Skipton halts foreign currency lending
As part of the Mortgage Credit Directive, which will officially come into play on 21 March 2016, lenders will have to give customers a risk warning when the difference between the foreign currency and sterling fluctuates by 20%.
Kris Brewster, Skipton’s head of products, said: “Unfortunately the new rules do mean from 1 October we will be unable to accept applicants who earn or plan to repay their mortgage from sources of any currency other than sterling.
“It simply isn’t cost effective for us to manage the currency risk.”
At the same time the society has committed to offering consumer buy-to-let mortgages after pledging to implement MCD changes smoothly and professionally.
Skipton has also announced that it is on track to provide ESIS illustrations from Jan 2016.
Brewster added: “We believe consumer buy-to-let is massively important in aiding customer mobility, particularly the need for let to buy solutions to remain on offer in the marketplace.
“Brokers have enough going on in their worlds without needing the added confusion of which lenders are doing what and when, so we’re happy to be up front and honest in sharing our plans with them and our commitment to do it right first time.”
He said: “We feel it’s important that we implement the new MCD rules promptly to ensure that both we and are broker partners can deliver the transition smoothly and professionally for our mortgage customers, we really empathise with our broker partners who will have to deal with yet more changes in the mortgage industry so close to the recent changes under MMR.
“We want to reassure brokers and help them as they navigate their way through this new legislative challenge.
“That’s why we’ve opted to issue the ESIS from the start, rather than implement the KFI+ and then later down the line move on to the ESIS. Launching early will also ease transitional pipeline challenges around binding offers and cooling off periods.”