Borrowers will now have their affordability stressed at 6.5 per cent or the product rate plus one per cent, whichever is higher, for remortgage applications on fixed rate terms of five years or less. This will apply to applications with no additional borrowing and excludes residential, buy to let or let to buy properties.
For terms of more than five years, remortgage borrowers will be stressed at the same rate.
Other application types will see buy-to-let borrowers’ affordability stressed at 7.5 per cent or the product rate plus two per cent, whichever is higher, on terms of five years or less. For fixed rate terms of more than five years, the stress rate is 6.5 per cent or the product rate plus one per cent.
TSB criticised for repricing notice period
The lender has also increased rates across its mortgages by as much as 0.2 per cent.
This follows reductions of between 0.2 per cent and 0.3 per cent made by the bank on Friday 3 March.
The bank was criticised for giving brokers a short notice period to react to the changes, as they were notified around 12.30pm today and the products were pulled at 1pm.
Hannah Bashford, director at Model Financial Solutions, said this was “incredibly unfair” to borrowers as they had little time to consider their options and it made it hard for advisers to manage.
Benjamin Blyth, director at Houz Mortgages, said: “Almost nothing can be done compliantly in 25 minutes. It shows how some decision-making by lenders is disconnected from the real world of delivering mortgage advice.
“This behaviour is not aligned with the spirit of Consumer Duty, as we can’t be pressuring people into proceeding with a recommendation.”
Brokers also noted that last minute rate withdrawals and changes were “unusual” as the last time this happened was during October when the mortgage market was unstable.
TSB will relaunch the repriced mortgages tomorrow, and select residential and product transfer deals will be impacted.
A TSB spokesperson said: “These changes were made so that we can continue to provide the levels of service our brokers and customers expect from TSB. Unfortunately, due to the changing market conditions, we were unable to give our normal 48-hour notice.”
