Family Building Society has announced a series of affordability enhancements for both residential and buy-to-let mortgage borrowers.
For owner occupier applications, stress test affordability changes will produce a higher affordability result for most applications of between 9-13%. In addition, all interest-only applications, which have no associated cost to the repayment strategy (such as downsizing, sale of another property etc.), will be assessed against the interest-only payment regardless of the mortgage term requested.
The Society has also reduced the minimum interest coverage ratio (ICR) requirement for all limited company buy-to-let applications to 125%.
Further improvements to the buy-to-let range include HMO and multi unit freehold block (MUFB) applications now accepted up to a maximum of 75%. In addition, HMO applications will now be accepted for individual and expat landlords.
Finally, the Society has reduced rates across its residential and buy-to-let ranges by up to 0.10%.
In its residential range, core two-year fixes have reduced by 0.05%, two and five-year fixed rate joint borrower sole proprietor (JBSP) rates are down by up to 0.10%, and the 95% LTV Family Mortgage has decreased by 10bps.
For UK landlords, all two and five-year fixed rates have decreased by 0.05% and new fixed rates for HMO properties have launched.
All limited company buy-to-let fixed rates have reduced by 0.05% and a new five-year fix is now available through select intermediaries and packaging partners. Two-year fixed rate expat buy-to-let products have also decreased by 5bps.
Darren Deacon (pictured), head of intermediary sales at Family Building Society, commented: “Improving affordability options for our buy-to-let and owner occupier products provides greater flexibility for borrowers looking to maximise their mortgage borrowing. The reduction of the ICR to 125% will be, I’m sure, particularly welcomed by limited company landlords. This change, alongside our philosophy of manual underwriting, flexible criteria and rate reductions will provide a real boost to intermediaries looking to provide more lender choice to their borrowers."
