Accord opens up 95 per cent LTV mortgages to all home buyers
The change, which takes place on 19 April, means all purchasers will now be able to apply for the lender’s five per cent deposit deals.
These had only been open to first-time buyers when first launched last month.
The 3.99 per cent five-year fix with a £995 fee will be available to all home movers under the same terms, with new-build homes and flats excluded.
Accord said demand from first-time buyers had been strong, but was confident that it will be able to maintain good service levels as it opens out.
The lender is not using the government’s guarantee scheme but several that are have announced their intention to go live with their offerings next week.
This will give greater availability in the market and help prevent those already active from being overwhelmed.
Jeremy Duncombe (pictured), managing director of Accord Mortgages, said: “We’re committed to supporting brokers and are pleased to have been able to give first-time buyers more choice, in what was a very limited market.
“We’ve been delighted with the response to our return to the 95 per cent market, and as more lenders have joined us in the market, we’re now in a position to offer it to more borrowers.”
Accord cuts rates up to 85 per cent LTV and Leeds BS adds two-year fixes
For house purchase products, rate reductions include the two-year fixed at 80 per cent loan to value (LTV). This has been cut from 2.46 per cent to 2.28 per cent.
The five-year fixed at 75 per cent LTV has been reduced from 1.87 per cent to 1.85 per cent. Both mortgages have a £495 fee, £500 cashback and free standard valuations.
For purchases and remortgages, the two-year fixed at 80 per cent LTV has gone down to 2.07 per cent from 2.25 per cent. The equivalent at 85 per cent LTV has been reduced from 2.72 per cent to 2.59 per cent.
Both mortgages have a £995 fee.
Jemma Anderson, mortgage manager at Accord Mortgages, said: “We’re really pleased to be able to offer further reductions to our residential range, offering more competitive choice to brokers and their clients.
“With a range of LTV and initial fixed rate term options, as well as a variety of benefits including cashback and free standard valuation, we hope these changes will benefit brokers and their clients.”
Leeds Building Society revises range with two-year fixes
Leeds Building Society has added a series of two-year fixed mortgages to its range.
This includes a fees assisted two-year fixed mortgage up to 85 per cent LTV with a rate of 2.55 per cent.
There is also a two-year fixed mortgage up to 65 per cent LTV, as well as a two-year fixed up to 75 per cent LTV. These products have rates of 1.42 per cent and 1.48 per cent respectively.
These mortgages offer incentives of free valuation and fees assisted legal services for remortgages. There is also a £999 completion fee.
Matt Bartle, director of products at Leeds Building Society, said: “Switching to a new deal could save homeowners money at a time when rates are historically low.
“Fixed rates remain a really popular choice because they give borrowers the security of knowing what their monthly repayments will be, which can be a big help when managing their household budget.”
He added: “We’ve refreshed our range and added a new two-year deal to our fixed rate product range, as we continue to work hard to help more people have the home they want.”
By understanding criteria and packaging requirements brokers can delight clients – Duncombe
The lack of sustained higher loan to value (LTV) products for much of the year, increased house prices and changes to criteria as a result of Covid-19 have all made it more challenging for potential borrowers to realise their homeownership dreams.
However, we’re seeing positive signs that the worst is behind us.
More lenders are returning to higher LTV markets, some first-time buyers have been able to save more money during lockdown and with the help and support of advisers knowing where to look and how best to apply, there is an increasing number of deals to be found.
The need for advice and support will also continue to be significant for the increasing number of self-employed people.
Changing and challenging criteria
Most lenders have amended criteria over the last 12 months, reflecting uncertainty in the economy, but this doesn’t need to be a “one size fits all” change.
Some customers are actually better off than they were before the pandemic, and some employment types have thrived.
Having the same underwriting rules for a restaurant owner and a delivery firm owner for example restricts choice and means that many good quality applicants could miss out.
But by being prepared, brokers have the opportunity to help more clients find a solution. Knowing what different lenders require and packaging cases to those requirements will save time and delight clients.
Lenders ready to support
We know that fewer cases going forward will be simple, and we’re ready for more complex cases.
We’ve invested in new technology to help brokers submit applications and we’ve increased our number of highly skilled underwriters, expanding our team by 21 new colleagues already this year.
We also know how important a common-sense approach to lending is for cases that don’t tick every box – that’s why our policy isn’t black or white; we look at cases to see how we can lend where it makes sense to do so.
For example, we recently supported a barber buying their first home whose income had been impacted by temporary closures as a result of lockdown, and a self-employed medical consultant experiencing less routine surgical work while operations were limited to essential only.
Our underwriters examined the cases in more detail and taking a rational view of the clients’ usual circumstances pre- and post-Covid, on top of the credible information they could provide, both received offers.
As the market bounces back from the pandemic, demand for advice from first-time or self-employed borrowers is likely to remain strong.
It’s a fantastic opportunity for advisers to explore the options available and offer support where it’s needed the most.
Accord and Coventry BS cut high LTV rates
Accord is trimming rates on its 85 per cent and 90 per cent LTV range by up to 13 basis points (bps).
From 25 March it is also introducing new options at 80 per cent LTV to support more brokers and their clients.
Some of the biggest rate cuts come at the 90 per cent LTV level. This includes a two-year fix with £495 fee reduced by 13bps to 3.35 per cent and the fee-free version down by the same amount to 3.65 per cent.
The broker arm of Yorkshire Building Society has also introduced two new products available for both house purchase and remortgage clients requiring 80 per cent LTV.
A two-year fixed rate of 1.99 per cent and a five-year fix of 2.20 per cent are available, both of which come with a £995 fee, £300 cashback and free standard valuation.
A large loan product at 85 per cent LTV available up to £2m has been introduced at 2.74 per cent fixed for two years.
It is available to home buyers and those remortgaging and comes with a £995 fee, £300 cashback and free standard valuation.
Jemma Anderson, mortgage manager at Accord, said: “We’re pleased to have been able to make a number of reductions in our higher LTV mortgage range, giving brokers and their clients with smaller deposits more choice.
“We’ve also added new home loan options at 80 per cent, giving both house purchase and remortgage customers short- and longer-term fixed alternatives.”
Coventry Building Society
Meanwhile, Coventry Building Society is making rates cuts of up to 20bps on some of its mortgages on Friday.
For purchases the 90 per cent LTV fee free five-year fix is being reduced by 16bps to 3.69 per cent and the 85 per cent two-year fix with £999 fee is cut by 20bps to 2.85 per cent.
Remortgage changes include the 85 per cent LTV two-year fix with £999 fee being reduced by 20bps to 2.79 per cent.
Interest-only products are also being trimmed by up to 14bps
Jonathan Stinton, head of intermediary relationships at Coventry Building Society said: “We’ve sharpened our rates to help us continue to support the market.
“Hopefully this new range continues to appeal to brokers and their clients, as there’s plenty of demand out there from clients looking to purchase and those looking to remortgage.”
Accord launches 95 per cent LTV mortgage for first-time buyers
The lender, which is part of Yorkshire Building Society, will not be using the government’s mortgage guarantee scheme for the introduction and said the deal will be available only through brokers.
However, it said the product would not have been possible without having the government’s scheme launching as well to bring more lenders into the market.
Accord emphasised that it will monitor demand for the 95 per cent LTV mortgages to ensure service levels were managed carefully and warned that it could be withdrawn at short notice.
The 95 per cent LTV deal is a five-year fix at 3.99 per cent and comes with a £995 fee and free standard valuation.
Accord said its standard underwriting policy and terms will apply, but with a maximum 4.49 per cent loan to income ratio (LTI) “to ensure prudent affordability”.
The maximum loan size is £500,000, and flats and new build homes are not permitted.
The deal is the first 95 per cent LTV offering from a major high street bank since the pandemic hit. Moneyfacts said it is the first available in England, Wales and Scotland not to be tied to a support scheme or regional restrictions.
Last month Mortgage Solutions reported that at least one mainstream lender was hinting at a return to the 95 per cent LTV market.
Monitoring market closely
Jeremy Duncombe, managing director of Accord Mortgages, (pictured) said: “Increasing house prices, the need to save for a larger deposit and limited choice in the higher LTV markets, means the goal posts have continually moved for many.
“We were one of just a handful of lenders that continued to offer 90 per cent LTV mortgages during the pandemic and have been monitoring the market closely to ensure we carefully broaden our support to those with even smaller deposits.
“This new 95 per cent mortgage will give brokers another option to help clients with smaller deposits realise their home ownership ambitions.”
He added that, being the first major lender to launch, it was important to balance demand with being able to offer the high levels of service brokers and clients expect.
“As such, this product may be withdrawn at relatively short notice, but we will continue to communicate our intentions proactively wherever possible,” he said.
“However, as more lenders join us in the 95 per cent LTV mortgage market, either with or without the mortgage guarantee scheme, we’re hopeful buyers with just a five per cent deposit will be able to benefit from a more sustained offering in the market.”
Yorkshire Building Society chief executive Mike Regnier told The Guardian there were more than 200 underwriters ready to service the demand.
The re-entry is likely to be welcomed by brokers who have been short of options to support borrowers with smaller deposits.
Reacting to the government’s scheme launch earlier this month, brokers said they were pleased it would bring more lenders into the market.
“This initiative is very welcome at a time when the availability of high LTV mortgage products is at an all-time low, and it should hopefully assist more buyers onto the ladder,” said Sharon Duckworth, director at Key Mortgage Advice.
Accord reveals sourcing system integrations and new BTL deals
The lender, which is part of Yorkshire Building Society, also revealed details of its integrations with mortgage technology providers to improve application submissions processes for brokers.
Accord has developed application programming interfaces (API) to work with the Iress, Mortgage Brain and Twenty7Tec sourcing and CRM systems allowing brokers to pre-populate client details into its MSO platform.
It launched with L&C Mortgages and is conducting a further pilot with Quilter on the Iress Xplan Mortgage system.
Initially the functionality will be rolled out to the Iress Lender Connect system followed more widely with all three major sourcing systems – the Iress Trigold and Xplan Mortgage, Mortgage Brain and Twenty7Tec – during the first half of this year.
Jeremy Duncombe, managing director at Accord Mortgages, said: “Broker and lender integration has been topical for some time, but the last 12 months have brought this into even more focus.
“We’re always looking for ways to improve our systems and processes to make things easier for brokers and are confident investing in this new technology will help them connect with us more effectively than ever before.
“Our MSO platform together with API connectivity means placing cases with us will be much more efficient, and speeding up the time taken to apply for a decision in principle means brokers will have more time to spend with their clients.”
BTL product update
The BTL changes include a range of products at 65 per cent loan to value (LTV) for purchase and remortgage.
These include a pair of deals with a £1,995 fee – the two-year fix is at 1.64 per cent and has £250 cashback, while the five-year option is at 1.96 per cent and has £500 cashback.
New three-year fixed rates for house purchase and remortgage are also being launched, available up to 75 per cent LTV with rates starting from 1.89 per cent.
Rates have also been trimmed on selected products across the range while cashback has been increased to £500 from £250 in some products.
TSB reduces high LTV rates and Accord amends affordability calculations
Effective from today, the 80 to 85 per cent LTV mortgage for first-time buyers and home movers, with a fee of £995, has a rate of 2.49 per cent.
At 85 to 90 per cent LTV, the fee-paying product has a rate of 3.24 per cent, while the fee-free option is set at 3.59 per cent.
Accord updates ICR for BTL borrowers
Accord Mortgages has made changes to the interest coverage ratio (ICR) used to assess the affordability of borrowers with outstanding mortgages on buy-to-let (BTL) properties who want to finance their own home.
From Wednesday, a customer’s BTL portfolio can be classed as self-financing meaning it will not be included in the affordability assessment, if rental income meets a minimum of 145 per cent of the mortgage payments at a stressed rate of 4.5 per cent.
This is a change from the current ICR of 135 per cent with a stress rate of five per cent.
If the ICR is not met, the shortfall will be used in the affordability assessment.
This change applies to both new and existing customers with background BTLs who need additional borrowing or want to make changes to their mortgage where an affordability calculation is required.
Nicola Alvarez (pictured), corporate account manager at Accord Mortgages, said: “We’re confident this change to the ICR will help more landlords finance their residential property without the need to include their BTL portfolios in affordability assessments.”
Accord temporarily pulls 75 and 80 per cent LTVs
Staff at its Lynch Wood site, where the majority of its underwriters are based, have been asked to self isolate after some employees tested positive for the virus. As the employees stay home and the office undergoes a deep clean, the lender has anticipated it will face capacity issues due to the reduced number of underwriters.
The products will be removed today at 8pm and any full mortgage applications for existing products must be submitted before then.
Agreements in principle (AIP) submitted by the deadline which have been referred will be honoured on the selected mortgages even if they have been accepted after the withdrawal.
Jeremy Duncombe (pictured), Accord’s managing director, said: “Our priority has always been the health and wellbeing of our colleagues, so we have taken the decision to withdraw products at 75 per cent and 80 per cent LTV to ensure service levels can be managed with our reduced capacity.
“Whilst we are doing everything we can to minimise the impact to service, in these exceptional circumstances with less underwriters available, there are likely to be some delays, so we advise brokers to check the current turnaround times on our website in order to manage client expectations.
“We expect this to be a very temporary pause on lending at these tiers and are still accepting applications on all other products within our range,” he added.
Accord adds high LTV products and cuts rates
The lender is introducing seven three-year fixed rate options across 75 per cent to 90 per cent LTVs for house purchase and remortgage.
It is also adding eight fee-free purchase and remortgage options at 80 per cent and 90 per cent LTV.
Examples of new products include a three-year fix at 3.74 per cent at 90 per cent LTV with £495 fee, £750 cash back and free valuation.
For remortgage customers, at 80 per cent LTV there is a five-year fee-free fix at 2.53 per cent with £250 cash back, free legals and valuation.
And for purchases there is a 90 per cent LTV two-year fee-free fix at 3.95 per cent with £750 cash back, and valuation.
In addition, a selection of rates at 75 per cent to 85 per cent LTV are also being reduced by up to 0.04 per cent.
This includes five-year fixes rate at at 75 per cent LTV cut to 1.89 per cent from 1.92 per cent and at 85 per cent LTV from 2.90 per cent to 2.86 per cent. Both are for purchase and remortgage and have a £995 fee.
Accord product manager Jemma Anderson (pictured) said: “Despite the current lockdown, we know the appetite to move house or make home improvements is still strong and with the market remaining open for business, we want to make sure we offer brokers as comprehensive a choice of products as possible.
“By launching the three-year fixed rate at 90 per cent we are providing additional support to those with a low deposit and the fee-free products, which have been incredibly popular to date, help reduce initial costs for those on a budget.”
Last week the lender noted it was hiring 26 new staff across its sales and underwriting teams.
It said demand was continuing above the pre-pandemic level
Two new business development advisers (BDAs) started before Christmas and are supporting the webchat function and aiding brokers with queries on new business applications.
Three new telephone business development managers (TBDMs) will be supporting brokers.
And 21 new underwriters joined last week to ensure service levels remain high and turnaround times stay as short as possible.
TMW and Accord increase buy-to-let mortgage rates
TMW, the buy-to-let arm of Nationwide Building Society, is increasing rates on 14 new business deals by up to 35 basis points.
The changes primarily affect its 75 per cent loan to value (LTV) products and include deals across its purchase and remortgage and remortgage only ranges.
Examples include the five-year fix for purchase and remortgage at 75 per cent LTV with £1,995 fee – which has been increased 20 basis points from 1.94 per cent to 2.14 per cent.
The two-year fix for remortgage only with free legals at 75 per cent LTV with £995 fee has also risen by 20 basis points from 1.99 per cent to 2.19 per cent.
The largest rise is the two-year fix also for remortgaging only with £250 cashback at 75 per cent LTV with £995 fee which has increased 35 basis points from 2.04 per cent to 2.39 per cent.
Meanwhile Accord has updated rates on several of its BTL product transfer deals making increases on eight and trimming them on two others.
The increases take place on the 60 per cent and 65 per cent LTV ranges by up to 10 basis points.
For example, in the 60 per cent LTV range the two-year fix with £0 fee has been increased by 10 basis points to 2.10 per cent.
And at 65 per cent LTV the two-year fix with £1,495 fee product has also increased by 10 basis points to 1.77 per cent.
Meanwhile, at 75 per cent LTV a pair of five-year fixes with zero fee and £950 fee have been cut by two and three basis points respectively to 2.37 per cent and 2.17 per cent.