Tiered ICRs for landlords and new commercial pricing initiatives

Lenders are preparing for the summer season with a range of new initiatives, such as Coventry for Intermediaries’ new tiered ICR proposition and Shawbrook Bank’s 0.25% arrangement fee discount, applicable to commercial mortgages.

Coventry for Intermediaries’ new tiered ICR proposition takes into account a landlord’s gross annual income and tax status.

The new mortgage proposition applies an ICR of 125% where each applicant’s total gross income is less than £40,000 and all applicants are non-taxpayers.  Where an applicant’s total gross annual income is £40,000 or more, or if they are a higher rate or additional rate tax payer, the ICR is 140%.

Minimum income requirements and minimum time in employment are also to be removed by the lender.  Previously, Coventry required applicants to have a minimum income of £25,000 or £30,000 for joint applicants and to have been in work for at least 12 months.

As part of its ‘Summer Stampede’ initiative, Shawbrook Bank’s Commercial Mortgages team has introduced a 0.25% discount on the arrangement fee for all new Applications in Principle.  The offer will run until 30th June, in tandem with Shawbrook’s standard existing customer discount and will be available for all Shawbrook’s products.

Specialist buy to let lender, Landbay, has announced the introduction of a retention fee for its approved distributor partners, including Mortgages for Business.

When completing on customer renewals, intermediaries working with Landbay will now receive a gross procuration fee of 0.3%.

Peter Brett, managing director of Intermediaries at Landbay said that introducing retention fees is part of Landbay’s ongoing commitment to the broker community, but will also come as good news for customers who now more than ever will be needing specialist advice at a time of regulatory and fiscal change.

NatWest is offering residential borrowers £500 cashback on selected two- and five-year fixed rate mortgage deals, while raising the rates on many two-year deals and cutting them on five-year loans. 

The lenders’ two-year fixed rate range now incorporates a 0.1% increase to 1.42% on a 60% loan-to-value (LTV) mortgage, which carries a £995 product fee as well as the new cashback.

The rate on the 80% LTV mortgage in the same range has been increased by 0.9% to 1.58%, and also carries the £995 product fee and cashback. Whereas the 95% LTV product is now priced at a rate of 4.29%, but carries no fee and comes with cashback.

As for NatWest’s five-year fixed rate residential loans, rates have been cut by 0.30% to 1.82%  on the 60% LTV product and by 0.22% to 2.26% on the 80% LTV mortgages.  Both come with a £995 product fee and £500 cashback.

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