Brilliant Solutions

Natwest Updates

NatWest for Intermediaries has released a product update. For their latest products visit the product page on their website or the news section of their intermediary website.  A summary of the changes is below.  Contact us for more information. 

Announcements

Buy to Let Proposition changes from 

Following feedback from our brokers NatWest Intermediary Solutions are pleased to announce a range of changes to their Buy to Let proposition which will implemented from the 23rd November.

What’s changing?

  • The maximum age at the end of the term for Buy to Let applications is increasing from age 70 to age 80.
  • Affordability Assessment – For applications where the term goes beyond the customer’s retirement age (for either one or both customers), only the rental income from the property being purchased/re-mortgaged will be used.
  • Interest Coverage Ratio (ICR) is reducing from 135% to 125% for basic rate taxpayers and letting agents fee costs will be factored into the background calculation for these customers.
  • Rental Income will no longer be used to achieve the minimum eligibility criteria of £25k per annum. All other sources of acceptable income will remain the same.

Transitional Arrangements/Pipeline Cases

  • Pipeline Management – Cases submitted before 23rd Nov 2020 will not be affected by these changes unless there is a significant change, such as the case lapsing or new property details required.
  • If an existing case would benefit from these changes, underwriters have the discretion to apply them.

For full details, including customer examples, please visit our latest news page.

Interest Only and Credit Affordability changes 

What’s happening?

Following broker feedback we are pleased to announce that from the 23rd November, we are making changes to our Interest Only proposition. Our aim is that this will enable you to help more of your customers secure an Interest Only mortgage with us.

We are also making a change to our background affordability calculations to ensure we continue to lend responsibly when assessing customers current and future mortgage eligibility.

What you need to know:

  • Interest Only acceptable income types will now directly match our capital and interest criteria i.e. we can now accept bonus income when assessing affordability.
  • For joint Interest Only applications, we have introduced a new minimum combined income of £100k per year see examples below.
  • A sole Applicants minimum qualifying income will remain at £75k per year.

Qualifying Income Examples

App Type             Income                Outcome

Sole                      £75K                     Meets minimum income – £75k sole income criteria

Joint                     £50K + £60K       Meets minimum income – £100k combined income criteria

Joint                     £75K + £20K       Meets minimum income – £75k sole income criteria

Joint                     £50K + £40K       Fails minimum income – Neither £75k sole or £100k joint income

Transitional Arrangements/Pipeline Cases

  • As a result of the affordability changes, there may be a reduction in the maximum lend compared to previous affordability assessments.
  • Pipeline Management – Cases submitted before 23rd Nov 2020 will not be affected by these changes unless there is a significant change, such as the case lapsing or new property details required.
  • If an existing case would benefit from these changes, underwriters have the discretion to apply them.
Coronavirus Update: Self-Employed Customers

What’s Happening

With the current restrictions and the UK Government extending the SEISS grant until March 2021, we have reviewed and updated our self-employed policy to ensure we are doing the right thing for customers.

Since 14 July 2020, individuals applying for a SEISS grant have been required to confirm their business has been impacted by Covid-19 to receive the grant.  Due to this confirmed impact and the potential ongoing effect Covid-19 has to businesses, we have made some changes to our self-employed policy.   

At this time our primary purpose remains to ensure that any mortgage we provide to customers is affordable.

What you need to know

From 24/11/2020, the following income cannot be used to assess mortgage affordability:

  • Income derived from a business that has applied for or received a SEISS grant on or after 14 July 2020.

We will continue to consider other forms of income to support an application for self-employed customers whose business have been impacted, i.e. rental, employed income or other businesses where SEISS grants have not been applied for or received.

Limited companies are not impacted by this change.

We will continue to review our policy in light of any appropriate changes which affect self-employed customers.

What you need to do

Review and follow the revised policy guidelines for self-employed customers on our website.

Complete the updated version of the supplementary information sheet as part of the required packaging when submitting a self-employed application.

Lending into retirement changes and ported illustrations

Background

As a responsible lender we have reviewed our current policy and we have taken the decision to withdraw lending into retirement for both new and existing customers.

Therefore, from 23/11/2020 we will no longer allow customers to take their residential mortgage past their intended retirement age.  We will however allow customers who are already in receipt of pension income to take their mortgage to age 70 (please see FAQ’s).

What’s changing?

  • Any porting illustration requests that include an element of lending into retirement need to be submitted by 16/11/2020.
  • If you submit a porting illustration request between 13/11/2020 and the 16/11/2020, please include in the ‘subject’ line of your email – ‘LIR porting request’.
  • The deadline for all applications to be received that have an element of lending into retirement is 21/11/2020.
  • Further information on our lending into retirement policy will be available via our A-Z from 23/11/2020.

What you need to do

  • Any lending into retirement porting illustration requests need to be submitted to us by the 16/11/2020
  • Any applications that have an element of lending into retirement need to be submitted by 21/11/2020

FAQs

  • A customer is a firefighter with an intended retirement age of 55.  The customer is currently 50 years old and wants to take a 10-year mortgage term. Can we proceed? No, the mortgage term will run past the customers intended retirement age and we are no longer allowing customers to take their mortgage into retirement. You should see if you can reduce the mortgage term or refer to whole of market.
  • A customer is 55 and has retired from their main profession from which they are receiving a pension. They have continued to work in some capacity and they intend to stop working completely at the age of 67. Can we proceed? In this instance we would be able to lend to the customer providing their mortgage term finished before they stop working. This would be classed as BAU lending as the customer is still in some form of employment. Both the pension income and employed income would need to be captured. However, if the customer was wishing to take the mortgage term beyond the age of 67 then we would not be able to proceed with the application. This would be the case even if the customer’s pension income alone would be enough to afford the mortgage.
  • A customer is 55 and has fully retired. They are receiving income from a pension and can afford a mortgage based on this alone. Can we proceed? Yes, we would be able to proceed as the customer has fully retired. We define a retired customer as someone who is no longer actively working or in any form of employment. 
  • A customer is working as a labourer and has said they are going to retire at 70. Can I take this customers mortgage to the age of 70? If a customer’s retirement age doesn’t look realistic based on their profession our underwriters may ask for further information. If you can provide rationale for why this is realistic then the application will be considered. 
NatWest to make decreases to Buy to Let range and re-introduce free valuations for Intermediary Purchase Products

Effective from the 24th November, we will be making rate changes across our new and existing customer ranges which are as follows;

  • There’s good news for buy to let customers as we are making rate reductions of up to 84bps across our buy to let range.
  • We’re reintroducing free valuations for Intermediary Purchase Products
  • Rate increases of up to 20bps across our Core remortgage range
  • Rate reductions in our product switch range of 5bps on our 2 year 60% LTV
  • Rate increases of up to 20bps and 19bps on selected 2 and 5 year deals 70% LTV and above respectively.

The summary of the rate changes are as follows:

New Business

Core Range – New Products

  • Green Purchase: 6 New purchase products across 2 and 5 year deals respectively
  • Purchase: A collection of new 2 and 5 year products, across multiple LTV bandings, product fees and cashback deals.
  • Buy to Let – Purchase A collection of new 2 and 5 year products, across 60% and 75% LTVs bandings

Core Range – Rate Changes

  • Remortgage: Rate decrease of 5bps on 60% LTV 2 year deal. Rate increases of up to 10bps and 20bps on selected 2 and 5 year deals respectively.
  • Remortgage – high value: Rate increases of up to 5bps and 2bps on selected 2 and 5 year deals respectively.
  • Buy to Let – Remortgage: Rate decreases of up to 79bps and 84bps on selected 2 and 5 year deals respectively.

Core Range – Withdrawals

  • Purchase: A collection of 2 and 5 year products, across multiple LTV bandings, product fees and cashback deals.
  • Buy to Let: – Purchase: A collection of 2 and 5 year products, across 60% and 75% LTVs bandings

Exclusives – Withdrawals

  • Buy to Let: – Purchase: A collection of 2 and 5 year products, across 60% and 75% LTVs bandings
  • Buy to Let: – Remortgage: A collection of 2 and 5 year products, across 60% and 75% LTVs bandings  

Existing Customer

Exclusives

  • Remortgage: Rate decrease of 5bps on 60% LTV 2 year deal. Rate increases of up to 20bps and 19bps on selected 2 and 5 year deals respectively.

You can download a PDF of the updated product ranges on our Website. For a full summary of the changes, including transitional arrangements, visit the Latest News section on our home page.

 

Share this:

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top