WE’RE STANDARDISING OUR RESIDENTIAL AFFORDABILITY CALCULATIONS
We’re making some changes to our residential affordability model from Wednesday 21 October.
We’re revising our loan-to-income (LTI) caps to a standard 4.49 times across all incomes in order to maintain service levels and retain the broadest range of products possible.
We’ll honour all DIPs submitted up to 8pm on Tuesday 20 October under our current
residential affordability calculations subject to 30 day validity period for all DIPs.
The new residential affordability model will apply to all DIPs submitted from Wednesday 21 October. And we recommend you check our updated residential affordability calculator prior to submitting an DIP.
The temporary changes will only impact new business and new applications for additional loans. Pipeline cases will not be affected, even if there is a material change to the application.
Any expired offer or FMA will be reviewed using the same LTI calculation it was submitted under.
By making this adjustment to our residential LTIs, we can manage volume and increase capacity with a wider range of products. We’ll continue to review the situation and reinstate the higher cap as soon as possible.
We’re increasing selected residential product fees and rates
We’re increasing selected rates and product fees across our residential product range from 9am on Friday 23 October.
Selected rates across all LTV’s and product terms will increase by between 0.05% and 0.15% and selected product fees will double. Examples of the changes include:
- A two-year fixed rate at 75% LTV for house purchase is 2.18% (was 2.13%) with £990 (was £495) fee, £500 cash back and free valuation
- A five-year fixed rate at 75% LTV is 2.10% (was 2.05%) with £1990 (was £995) fee. This product is available for both purchase and remortgage customers
- A two-year fixed rate at 85% LTV for house purchase is 3.25% (was 3.10%) with £990 (was £495) fee, £500 cash back and free valuation.
We’re also withdrawing and not replacing two 85% fixed rate deals – codes 52236 and 52237
The current range of affected products will be withdrawn at 8pm tonight and replaced at 9am on Friday.