Newcastle for Intermediaries has unveiled a new range of products to help those looking to increase their homebuying affordability power.
Its Affordability Boost proposition is available with selected products and offers improved affordability by assessing borrowers more favourably than standard residential five-year fixed-rate criteria. The result is that borrowers can increase the size of their loan depending on their financial situation and requirements.
BOOST IN ACTION
Newcastle for Intermediaries says a couple with one child, a combined income of £75,000 and monthly credit commitments of £650, could typically borrow up to £305,000 with its standard fixed-rate products when borrowing at 85% LTV. However, with an Affordability Boost mortgage, they could borrow up to £375,000.
The proposition is available up to 95% LTV for customers looking for a fixed rate mortgage over more than five years, including first-time buyers, home movers and re-mortgagers.
Included in the range is a 72-month fixed-rate at 5.24% (6.4% APRC) available up to 90% LTV that comes with a £999 product fee and early repayment charges of 6% until 31/03/26, 5% until 31/03/27, 4% until 31/03/28, 3% until 31/03/29, 2% until 31/03/30 and 1% until 31/03/31.
The 72-month product is designed to ensure that by the time a borrower completes on their property the product still has more than five years remaining on their term.
“the way affordability is assessed for shorter term products sometimes limits opportunities for borrowers to own their dream home”
Francesco Di Pietro, head of intermediary mortgages at Newcastle Building Society, said: “Current market conditions have had a negative impact on borrowing capacity and the way affordability is assessed for shorter term products sometimes limits opportunities for borrowers to own their dream home.
“By adapting to the dynamic nature of the market we can ensure that we continue to offer brokers a flexible proposition that meets the needs of their clients. That’s why we’ve worked collaboratively with our broker partners to develop a new range of products to improve affordability in a sustainable way.
“The Affordability Boost range is complemented by the enhancements offered by our flexible lending criteria, direct access to our team of underwriters and support for each broker via their dedicated regional business development manager.”
Tanya Toumadj, managing director at Mortgage Broker Tools, said: “Affordability is very much still a constraint to borrowers, and at present no lender meets the loan requested in around 15% of our cases, with around 50% of these cases being below a LTI of 5.5, so income multiples aren’t the sole constraint.
“However, a significant proportion of borrowers are flexible in terms of the length of term they want to commit to, with 33% of all our cases opting as ‘undecided’, therefore Affordability Boost offers a realistic option to brokers looking for solutions to their clients affordability challenges.”
