The society will now take 75% of an individual’s investment income into consideration when calculating their affordability, an increase from 50% previously.
This investment income will be assessed alongside any earned income, plus 100% of any private or state pension, maintenance payments and tax credits.
In addition, the mutual will no longer deduct expenditure relating to pension contributions, whether standalone or deducted at source, when carrying out affordability assessments. It said this would assist employed and self-employed applicants who are paying into their pension each month.
This applies to capital and interest repayment mortgages and for mortgages on an interest-only basis where a suitable alternative repayment strategy is in place, the lender said.
Complex client needs
Richard Norrington, CEO of Ipswich Building Society, said that borrowers’ needs were becoming increasingly complex.
He added: “We are continually looking at new ways to improve our offering and are pleased to share these changes to our lending criteria, increasing accessibility for applicants with investment income and those who are paying into their pensions.
“By employing expert manual underwriting, we can assess each case individually and on its own merits, and by taking personal circumstances into account, we can get a true picture of the circumstances of each applicant rather than relying on automated computer processes and credit scoring.”
