Covering Residential Mortgages, BTL, Secured Loans and Bridging Finance; all of the Precise Mortgage products are available via our specialist packaged team and our direct to lender mortgage club.
We’ve signed up to the Mortgage Charter
With the value of outstanding mortgages with arrears rising by 28.8% over the past year*, we know your customers may be worried about their repayments.
So, we’re pleased to let you know we’ve signed up to the government’s Mortgage Charter, which has been set up to support residential customers who are up to date with their payments but may be feeling the cost-of-living pinch.
As a signatory of the Mortgage Charter, we’ve agreed to:
- Allow customers to reduce their monthly payments by either extending their term or switching to interest only payments
- Ensure your customers’ credit files won’t be impacted by the switch, even if they ask for advice or guidance around their mortgage repayments.
- Allow customers to switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check.
- Provide well-timed information to help customers plan ahead should their current rate be coming to an end.
Take a look at the support we could offer your clients >>
The support offered will be dependent on your customer’s personal circumstances and is available on first charge mortgages only. It’s important to note, that the option chosen could increase the overall cost of your customer’s mortgage.
If any of your customers are worried about their mortgage repayments, please let them know they can get in touch with us by calling 0800 298 5714 or visit our support page here.
Find out how top slicing could help your landlord customers
Top slicing allows landlords to
- Achieve greater flexibility around loan size
- Choose from a wider range of products
- Maximise their investment opportunity
Here’s an example of how top slicing works
- Your customer’s looking to purchase a property on the market for £300,000 to add to their buy to let portfolio. Looking at similar properties in the area they’re expecting to achieve gross rental income of £1,400 pcm.
- With the current market volatility, your customer doesn’t want to be tied in for a long period and ideally wants the flexibility offered with a short-term fixed rate.
- On our limited edition 4.69% 2-year fixed rate with a 5% product fee, affordability is assessed at 8.50%, meaning with the ICR alone the maximum loan achievable is £122,981, well short of the amount needed.
- We assess 5-year fixed at pay rate, but even then our limited edition 5.69% fixed rate returns a maximum loan of £183,727, still short of what they need.
- However, your customer has no mortgage on their main residence and earns £3,500 from salaried income as well as attracting £8,500 from portfolio income. Having checked affordability, we can see they have around £1,250 disposable income each month and can now apply top slicing, allowing them to achieve the full £225,000 loan size needed on the cheaper 2-year fixed rate.
Top slicing top tips
- Affordability stressed at 110%
- No minimum income requirement for loans under £1m
- Portfolio landlords accepted and can use their surplus rental income
- Available for new purchases only
Speak with your business development manager if you have any questions, or call our dedicated support team on 0800 116 4385.
Important update
From 23 September the minimum ICR for personal ownership applications will be simplified. In addition we’re also changing how we assess buy to let affordability on short-term fixed rates and variable rate trackers.
Minimum ICR calculation
Higher rate and additional rate taxpayers now calculated at 140% previously 145% for higher rate and 160% for additional rate
Bespoke ICR calculations for tenants in common will be removed
- Basic rate taxpayers calculated at 125%
- Limited company applications remain unaffected at 125%
- Top slicing applications are unaffected and must continue to meet a minimum 110%
Assessment rates
Short-term fixed rates now assessed at pay rate plus 1.55% (minimum 5.50%)
Variable rate trackers now assessed at pay rate plus 1.55% (minimum 5.50%)
- 5-year fixed rates are unaffected and continue to be assessed at pay rate
How does this impact me?
Any personal ownership DIPs that are in progress will need to be progressed to DIP Decision stage before close of business on Friday 22 September.
Any personal ownership DIPs that are not progressed will be cancelled from the system and will need to be rekeyed.
Note that any limited company DIPs in progress as well as fully submitted applications will be unaffected.
To find out more, speak with your Business Development Manager, call our dedicated support team on 0800 116 4385 or use Live Chat.