This Week's Mortgage Pulse: Accord’s Part & Part Update, Halifax’s New Age Limits and LTV Enhancements from Metro Bank

The Mortgage Stop - Week in Review - 15th March 2024

Accord Enhances Flexibility in Part & Part Mortgages

In a move that shows continued commitment to common-sense lending Accord Mortgages Limited have announced some enhancements to their Part and Part lending rules where Sale of Mortgage Property (SOMP) is the repayment vehicle.

What’s changing?

Accord have changed the way they calculate the equity requirement from the time of application to the end of the mortgage term. The Capital and Interest (C&I) component of the Part and Part loan will now also be included in the equity calculation.

This change potentially means that more borrowers will meet the minimum equity requirements, with more passing the equity threshold with lower-value properties.

What else do you need to know?

• This is for Residential Loans only - its not available for Buy to Let lending
• For Interest Only loans, the equity calculation will remain at the time of application
• The property must have a minimum equity of ￡250,000 at the end of the mortgage term, or ￡300,000 if the security address is in London
• SOMP can be used to cover a maximum of 60% of the value of the property
• Total borrowing remains up to a maximum 85% LTV for Part and Part loans (a maximum of 75% can be on Interest Only with another acceptable repayment strategy)

Halifax introduces new age limits: A new challenge amidst the cost of living crisis

From Monday 18 March, Halifax are changing the maximum working age on certain applications where specific circumstances are met.

The majority of borrowers, subject to a successful application, will still be able to borrow up to the age of 75. However a maximum working age of 70 will apply to:

• Remortgage applications with any capital raising / additional borrowing
• Some purchase and remortgage applications because of the borrowers credit score and overall credit profile.

Halifax have said that these changes were made as part of a regular review of their lending criteria and as they look to lend responsibly to a broad range of customers. For all other applications they intend to continue to use a maximum working age of 75.

Metro Bank Broadens Borrowing Horizons with LTV Increases

Metro Bank (UK) made some enhancements to their residential maximum loan sizes, providing borrowers with greater flexibility and choice.

So, what's new?

• Maximum loans up to 90% LTV increased from ￡675k to ￡1.125m
• Maximum loans up to 85% LTV increased from ￡1m to ￡2m

It's important to note that New Builds are still restricted to maximum loans of ￡1m at 85% LTV and ￡675k at 90% LTV.

A Week of Mixed Signals: Rate Changes Across the Mortgage Sector

Its been another week of lenders sending mixed signals on updates to their products with a mix of increases & reductions in interest rates.

Natwest, Halifax, The Mortgage Works and Santander have all increased rates across their products ranges, although Santander did reduce rates on some. Gen H & Coventry Building Society bucked the trend and announced some welcome reductions.

There continues to be uncertainty across the market and different funding models and hedging strategies are clearly affecting lenders in different ways as they adjust rates to protect margins or remain competitive.

Upcoming Financial Highlights: Key Dates and Decisions

Finally its a big week next week with updates on the financial calendar and key updates:

Monday 18th March 2024: Latest Rightmove Index

Wednesday 20th March 2024: Latest inflation with both Core CPI & CPI data

Thursday 21st March 2024: Public Sector Net Borrowing & at mid-day the Bank of England Interest Rate Decision

Friday 22nd March 2024: Retail Sales Data for both YoY and MoM

Your home may be repossessed if you do not keep up repayments on your mortgage. You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing other debts against your home.