"In particular, we believe the relaxation of the stress testing will be beneficial to many customers at a time when they need it the most."
- Emma Graham, business development director at Hodge
Hodge has announced a series of criteria enhancements to its later life and professional mortgage products.
In its later life range, Hodge has increased income multiples across its 50+ and RIO ranges from 4.49 up to 5 times income on an interest-only basis, and from 4.49 up to 5.5 times on a repayment basis.
In addition, the lender has reduced the stress rate for pound-for-pound remortgages, reduced living costs to reflect the reduction in the energy cap from 1st October, and started to accept a life insurance policy to support affordability under the death stress test.
Across Hodge's professional mortgage range, it has removed the need to meet capital repayment affordability when assessing interest-only applications.
It has also reduced the minimum income for those applying for a professional mortgage from £35,000 to £30,000, increased the maximum age for applicants from 40 to 50, and updates its income types to allow projected income from chambers for trainee barristers.
Louise Swainston, head of mortgage risk at Hodge, commented: “Affordability continues to remain a challenge for mortgage customers across the market as interest rates remain high and the cost of living continues to rise.
“To help support our intermediary partners and their customers meet affordability hurdles, we have factored the news of the decrease in the OFGEM energy price cap into our affordability assessment, as well as reducing our stress rates for like-for-like remortgage borrowing. This will support customers who fail the death stress allowing us to assess affordability based on the policy covering or partly covering the loan in addition to their personal income.”
Emma Graham, business development director at Hodge, added: "Our enhanced criteria changes are part Hodge’s pledge to work with its intermediary partners to create products that are fit for their clients, and that complement the wide range of incomes that it already accepts.
"We have developed this package of supporting criteria enhancements to help customers, particularly those who are looking to remortgage, with any affordability issues in mind. In particular, we believe the relaxation of the stress testing will be beneficial to many customers at a time when they need it the most.
"Our later life products allow for debt consolidation and assess interest-only mortgages on an interest-only basis. So, as a lender we believe we are doing all we can to help our intermediaries navigate the affordability challenge they are facing at the moment.
"Removing the need to meet capital repayment affordability is yet another way Hodge continues to show its commitment to providing solutions for underserved areas of the market.
“Aspects of the professional mortgage market have previously been underserved from a high street perspective, but throughout 2023 we have continued drawing on the knowledge of our highly experienced underwriters to add real value to this complex area of the market.
“We understand that like life, the level of income many people have at their disposal is less than straightforward - not least in the current economic climate - and this is yet another way Hodge has been able to offer support to our customers in the moments that matter."
