The lender will be offering lower rates for product transfers (PT) than remortgages for the first time as it addresses market changes triggered by the coronavirus crisis and while application levels have remained resilient.
Keith Barber, associate director for business development at the mutual (pictured), told Mortgage Solutions that he believed the remortgage and product transfer market was where the lender could work best.
It has moved to desktop valuations for loan to values (LTV) of up to 60 per cent, which Barber said covers much of the business it typically receives.
“We will be writing out to brokers with details of our product transfer range later this week and for the first time PT range will be more competitive then remortgage range,” he said.
“One of the things we want to stress to brokers is that their clients can have a product transfer if the borrower is on a payment holiday.”
Barber added that business volumes had not been severely dented because of its focus on the remortgage market.
“It has been fairly steady all year, particularly early March which was fairly consistent with the last quarter of 2019,” he continued.
“The first week of April has been fine, if not a little bit of an uptick on the previous weeks. There was a little bit of a drop off in mid-March, but not a huge change.”
Barber added that he expected the lender to be fairly well insulated from the drop off in purchases that will happen as a result of the government’s restrictions.
Products and criteria
The trio of mortgages launched all have a maximum 60 per cent LTV and replace those withdrawn by the mutual this week.
It has increased the cashback for residential remortgages where the client is using external solicitors from £250 to £400.
The minimum loan size on residential interest-only fixed rates have also been slashed down to £45,000 from £200,000.
The first product launched is a residential interest-only five-year fix at 3.34 per cent with a £999 product fee.
Borrowers can be stressed at their pay rate for affordability, there is no minimum income or minimum equity and applications will be accepted up to age 89.
The mutual has also launched a buy-to-let deal for standard applications and limited companies, and an expat buy-to-let loan.
The buy-to-let deal is available on repayment or interest-only terms, fixed for five years at 3.34 per cent and has a £999 product fee, with a minimum loan of £45,000.
Stressing is done at pay rate at either 130 per cent or 145 per cent, there is no minimum income requirement and portfolio landlords are accepted with no back stress testing on the portfolio.
The expat deal is a five-year fixed rate interest-only at 3.49 per cent with one per cent product fee and £100,000 minimum loan.
Stressing is conducted at pay rate at 130 per cent or 145 per cent, no minimum income is required with employed, self-employed and retired applicants accepted.
Portfolio landlords are accepted with no back stress testing on the portfolio and applicants from more than 40 countries are permitted.