Mortgage rate updates: mortgages for older borrowers and further criteria changes

It has certainly been a mixed bag in the market this week as far as mortgage rate updates are concerned, with many lenders continuing to alter their criteria and extend their reach. Buy to let has unsurprisingly remained a talked-about sector, and lenders have also been extending their offers for more specialist deals, such as maximum loan sizes and interest only offers, as well as increasing loan limits for first time buyers and buy to let.

We are also excited to see times have well and truly changed since the credit crunch, as assigned contract products have started to re-enter the market. This essentially helps secondary investors in property developments borrow what they need to buy out the original purchaser. As such, we have teamed up with a couple of lenders to help borrowers do so.

Elsewhere in the market, more options for older borrowers are appearing, with the likes of Mansfield Building Society upping its maximum mortgage lending age to 85 this week. The firm Hodge Lifetime has also now entered the mainstream residential market for borrowers over the age of 55.

The extension of Mansfield’s maximum age limit (from 80 to 85) applies to its existing 2 year discounted rate product up to 60% loan to value (LTV). Available on both purchase and remortgage with a maximum repayment term of 30 years, this is currently accessible to borrowers on a capital repayment basis only, or up to the age of 80 for interest only deals. An interest only downsizing product up to the age of 80 is also available from the lender with a maximum LTV of 40%. Otherwise, a maximum age of 70 is accepted across Mansfield’s standard range, of which 100% of gross pension income will be considered for affordability calculations.

In line with this, Hodge Lifetime’s new over-55’s product is available on interest only, with a maximum term up to the age of 95 if the loan is taken out by more than one person. This interest only deal is applicable for house purchases, remortgage or capital raises, with a maximum LTV of 60% and a £995 product fee. Rates start at 3.49% for a 2 year fix or 3.95% for a 5 year fixed rate. A 2 year discounted loan is also available at 3.3%.  This includes either employed or self-employed, as well as state, personal or company pension and rental income.

Many lenders have clearly been pushing their boundaries in order to offer the best terms possible amid the ongoing price war, bringing more competition to currently underserved spaces of the market.

In other news, Kensington Mortgages announced an increase to its maximum loan limit for both first time buyers and buy to let mortgages this week. The maximum loan on buy to let has now increased from £1 million to £1.5 million, and to £1 million from £500,000 for first time buyers. Following this, Brightstar has become the first distributor to add Kensington to its lending panel, offering all core residential and buy to let ranges, as well as an exclusive 90% LTV product. Rates now start from 4.89% for a 2 year fix or 5.19% for a 3 year fixed rate.

Meanwhile, Leeds Building Society has announced it will be accepting the sale of property as a repayment method for a selection of interest only borrowers. This is available to those currently on a part and part interest only mortgage at up to 75% LTV, which is especially popular for customers remortgaging. This allows the flexibility of paying down the loan in a more manageable way for those already on a full interest only term. Chelsea Building Society has also applied changes to its product offering, having launched a fee-free offset mortgage range. All mortgages within the range include free standard valuation, £250 cashback on completion and free standard legal fees for remortgage customers. These products include a 2 year fix at 2.09% up to 65% LTV and a 2.14% 2 year fixed rate at 75% LTV.

As far as commercial finance is concerned, the popularity of short term bridging loans has been increasing greatly. Mint Bridging revealed that short term bridging loans generated an 820% increase in its records compared to Quarter 1 in 2015. This comes alongside a record month for the lender in March, with the largest loan confirmed at £3.5 million. Mint Bridging recently increased its maximum loan size to £5 million.

Not only this, Quantum by Bridgebank Capital is now offering short term redevelopment finance up to 70% LTV with interest rates from 0.85%. Available to loans up to 100% LTV with additional security, this is for loans based on market value for terms between 1 and 12 months.

Consequently, this notoriously expensive product type is becoming increasingly affordable, as a surge in demand has allowed lenders to offer cheaper rates as a result.

As per standard, although the aforementioned rates are indicative of current market activity, private lenders will not publish their rates, so we are restricted in our ability to relay this information. Yet we should emphasize the fact that their rates are often much more competitive.

If you have any questions on this week’s mortgage rate updates or market activity in general, please feel free to contact one of our expert brokers who will always be happy to discuss your options. Alternatively, you can stay on top of the latest rates and industry news with our daily mortgage rate updates.

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