Borrowers can choose to make one payment or several payments, as long as total over-payments do not exceed the 50% cap within the term of the fixed or discounted rate.
At the same time, the society has added three fixed rates to its range. A rate of 1.39% is available up to 75% loan-to-value (LTV), alongside a rate of 1.55% up to 85% LTV, both fixed for two years. The products are available for purchase and remortgage loans up to £500,000 and carry an application fee of £199 and a completion fee of £800.
For purchase applicants with a 5% deposit, the society is offering a rate of 3.29%. Loan amounts are capped at £350,000.
Andrew Montlake, director, Coreco, said: “The mortgage market definitely needs lenders like Ipswich which is prepared to take a more proactive view on borrowers needs and circumstances.
“The rates are certainly decent, but being able to pay off up to 50% of the loan amount without penalty will be a boon to many borrowers who want the extra flexibility it brings as their circumstances change.”
Buy-to-let mortgage prisoners
In a note to its brokers, the society said it wanted to help buy-to-let customers who had become mortgage prisoners since the introduction of tougher rental income calculations had been introduced. A transitional buy-to-let transaction is a straight-swap remortgage, with no additional borrowing, assessed using pre-PRA rules. Ipswich will assess transitional buy-to-let remortgagors using a rental calculation of 125% of the pay rate. The current pay rates are 3.19% and 3.39%. The application must meet the rest of the society’s standard buy-to-let criteria.
The Ipswich’s changes follow a lukewarm reception for Tesco Bank’s rate cuts, which broker Simon Collins, technical director of John Charcol, said was indicative of the current attitude among lenders, which he described as ‘riding in packs’ when it came to rate changes. He said lenders, already operating with squeezed margins, needed to differentiate their products on criteria, if they were not prepared to make bold movements on rates. Tesco Bank launched two fixed rates which sat exactly 0.05% behind the market leaders Halifax and Skipton.
Ipswich Building Society’s new fixed-rate products will be available to direct applicants and Prestige intermediaries exclusively for a number of weeks before they become available to the society’s wider intermediary panel.