Leeds BS increases its buy to let income coverage ratio (ICR), Fleet launches new limited company loans, HSBC withdraws is ‘record-breaking’ 0.99% mortgage, while mobile bank Atom launches a new intermediary-only range and Newcastle enters Help to Buy new build market.
Leeds Building Society is preparing for the looming changes to landlord taxation by announcing the following changes to product criteria.
As from 1 January, Leeds will implement an ICR of 140%, up from 125%, for its buy to let and holiday let mortgages. In addition, it will apply an affordability stress test rate of 5.5% for purchase and capital raising remortgages.
The less strenuous stress rate of 5% will be applied to pound-for-pound remortgages, a decision the lender says will help “a significant amount of landlords with existing properties looking to move and improve their portfolio”.
ICR requirements will not apply to existing Leeds customers who are coming to the end of their deals and wish to borrow the same amount. Furthermore, the lender is removing the minimum income requirement of £25,000 for individuals and £40,000 for joint applicants.
Fleet Mortgages brings three new limited company products to the market, for borrowers wanting to purchase or remortgage.
Now available from Fleet is a two-year fixed rate mortgage at 3.40%, with rent calculated at 125% at 5%; a five-year fixed mortgage at 3.79%, also with rent calculated at 125% at 5% and a pay rate lifetime tracker at 4%, where rent is calculated at 125% at 4%.
The new mortgages are available up to 65% loan-to-value (LTV).
Meanwhile, HSBC has withdrawn its ‘cheapest ever’ 0.99% two-year fixed mortgage.
The loan, which was launched in June, was offered up to 65% LTV and carried a fee of £1,499.
In a statement, the bank said: “When the cost of funding comes down we are always quick to pass on the benefit to customers, and we have been able to do that for almost six months with our 0.99% rate mortgage. The cost of funding has gone up over the last month or so and we have had to reflect that in our recent pricing review.”
Mobile bank, Atom, has launched an intermediary-only residential mortgage range, with buy to let mortgages to follow soon.
The new range will be available through select partners under the brand “Digital Mortgages by Atom Bank”.
Atom Bank launched in April this year, with two savings accounts and SME lending via a panel of specialist business intermediaries. The bank obtained its banking licence a year before in June 2015.
The residential mortgage range that it has now launched will include deals for the self-employed and contractors, lending into retirement, purchase and remortgage, shared ownership and new-build deals.
Once an Atom mortgage has been recommended by an intermediary, customers will need to download the Atom App, available free via the Apple or Google Play stores.
Another intermediary-only lender, Newcastle Intermediaries, has moved into the Help to Buy new build market.
Newcastle’s new range will include both the standard 20% equity loan and a 40% Help to Buy London loan.
Valid for six months, two and five-year fixed term deals are on offer for new build mortgages.
The new products offer a free valuation and £300 cashback, with overpayments up to 10% allowed without penalty.
The lender is also launching a fee-free remortgage product fixed for three years at 2.35% to 75% LTV.
7th December 2016