Keystone Property Finance has reduced all five year fixed rates in its Classic Range by 40 basis points, now starting at 4.39%(5.2% APR). It has also reduced a term tracker by 10bps to 4.39% (LIBOR + 3.81%) to 75%.
In addition to rate reductions, the following criteria changes have been made:
• Maximum number of units in a multi-unit has been increased to six (from four)
• Minor unsecured credit will now be considered
• Maximum lending exposure now £1m
• Applicants who are not home-owners must own at least two buy to let properties
Keystone has also launched its new online broker portal, known as KASS (Keystone Application Submission System), which will speed up case processing and allow brokers to track the stages of every deal.
Commenting on the changes, managing director, David Whittaker said:
“Despite the Brexit result, its business as usual at Keystone and as you can see we have been very busy. The reduction in rates means that we are now able to better compete on pricing, particularly with five year fixes.
“Brokers will be particularly pleased that we have been able to up the procuration fee to 0.6% of the loan.”
Previously the procuration fee available to brokers on products in the Classic Range was 0.5% of the loan amount.
Keystone pays brokers promptly on completion.
These changes come just weeks after Keystone announced it was to introduce separate stress tests for individual and limited company borrowers applying for products in the Classic Range which is funded by Paratus AMC.
The new stress tests, which were to have come into effect on 14th June 2016 were delayed until today to help brokers accommodate their existing pipelines.
For individuals the new formula of 145% at pay rate or notional rate of 5.25%, whichever is higher, will be applied to term trackers and 3 year fixed rates. For borrowers choosing a 5 year fixed rate, the pay rate will be used.
Stress tests for limited companies are to remain at 125% of pay rate or notional rate of 5.25%, whichever is higher, for term trackers and 3 year fixed rates. For limited company borrowers choosing 5 year fixed rates, the pay rate will be used.
Increasing stress tests for individual borrowers is expected to be the direction of travel for the buy to let industry in light of the forthcoming caps on finance costs and the proposals for stricter underwriting standards as set out in the PRA’s consultation paper (CP 11/16).
Keystone is one of the few buy to let lenders to offer products to trading limited companies as well as Special Purpose Vehicles.