Clydesdale Bank increases select resi and BTL products by up to 0.34 per cent
The changes come into effect from 8pm today.
The lender said core residential two and five-year fixed rates between 75 and 95 per cent loan to value (LTV) will go up by around 0.23 per cent.
Two and five-year fixed rates for loans above £1m will increase by around 0.21 per cent.
Professional and newly qualified professional fixed rates will rise by around 0.19 per cent.
On the buy-to-let side, two-year fixed rates between 60 and 75 per cent LTV go up from around 0.16 per cent.
Five-year fixed rates between the same LTV tiers will increase by up to 0.34 per cent.
The lender added that it would make select two and five-year fixed rates which were previously available only to existing customers available for all customers.
Clydesdale takes ‘cautious approach’ to BTL business in financial update
The group attributed its mortgage performance to the prioritisation of its margins in an “increasingly competitive environment”.
Its net interest income rose from £677m to £782m which it said was down to the higher rate environment, supportive conditions in the deposit market and improved liability mix which offset the pressure on mortgage spreads.
The group reduced its credit impairment provisions because of the overall stability of its mortgage portfolio and improved factors such as rising house prices. The average weighted loan to value (LTV) of its loan book remains low at 54.4 per cent, down on the 55.3 per cent reported 30 September 2021.
It released £9m in expected credit losses (ECL), bringing this down from £33m to £24m. It also reduced its post model adjustments (PMA), which are reserves to address any shortcomings in its ECL. This was cut from £54m to £42m.
Clydesdale lowered its PMA for payment holidays, which was introduced in 2020, as it said borrowers had “successfully exited” arrangements. This now stands at £8m, down from £22m.
However, it considered it to be likely that a group of borrowers will suffer “increased stress” from the heightened cost of living, so a £3m temporary affordability stress PMA has been introduced in response.
Other PMAs totalling £2m have also been retained.
Clydesdale’s PMAs for its buy-to-let portfolio remained fairly stable, with a nominal increase from £28m to £29m. It said it was taking a “cautious approach” to this component of the portfolio.
A spokesperson said: “The group continued to monitor the level of ECL held on BTL mortgages in the year due to uncertainty of the extended impact on landlords and that of their tenants. A new PMA is now held to reflect an impact on debt affordability as a result of rising energy prices and other inflationary effects.”
Overall, the group maintained PMAs to address ongoing economic uncertainty over anticipated defaults in the future.
Profits and future preparations
Clydesdale reported a statutory profit before tax figure of £313m, up from £70m last year. Its underlying profit before tax stood at £386m, up from £243m.
It said this was driven by improved income and lower impairments.
The group said the macroeconomic outlook had “become more uncertain” over the six months and said it was “carefully monitoring” the impacts of higher inflation on the cost of living and the conflict in Ukraine.
However, it said it was not yet seeing signs of “significant stress” in the book.
“We enter this period with prudent coverage, robust underwriting and a defensive portfolio,” it added.
David Duffy, chief executive, said: “We’ve made good progress against our strategy, while delivering a significant increase in profit. We have positive momentum in attracting new customers to Virgin Money through record credit card sales, good growth in personal current account openings and a strong uptake of our new digital fee-free business current account.
“We have upgraded our net interest margin guidance given strong growth in unsecured lending, combined with the rising interest rate environment. Looking ahead, while the macroeconomic outlook is uncertain and there are increased cost pressures on consumers, we remain prudently provisioned and are confident in the quality of our loan portfolio.”
Clydesdale Bank ups select rates by 0.32 per cent
The lender has increased two and five-year fixed rates at 90 per cent LTV for loans between £600,000 and £1m by up to 0.32 per cent.
This includes a two-year fixed residential product which has gone from 2.67 per cent to 2.99 per cent.
Residential two and five-year fixed rates between 65 and 85 per cent LTV for loans over £1m increased by around 0.16 per cent.
An example includes its five-year fixed rate at 65 per cent LTV which now stands at 2.55 per cent, a rise from 2.44 per cent previously.
On the buy-to-let side, Clydesdales’ products at 60 per cent LTV have risen by up to 0.16 per cent, which includes its two-year fixed rate going from 2.24 per cent to 2.4 per cent.
It added that select buy-to-let rates at 75 per cent LTV have gone up by 0.15 per cent.
Clydesdale Bank has increased its professional and newly qualified professional rates by up to 0.12 per cent.
Finally, the lender has upped select two and five-year fixed rates between 75 and 90 per cent LTV by up to 0.09 per cent.
Recent BTL offerings are still as dynamic as the changing market – Armstrong
This makes for a highly dynamic lending environment which is generating its fair share of opportunities and challenges for a range of landlords.
From a pure product perspective, let’s start this month’s round-up with some new entrants into some interesting areas of the BTL marketplace.
First up, CHL Mortgages entered the short-term let marketplace with the launch of a five-year fixed rate product range, up to 75 per cent loan to value (LTV).
This follows the recent introduction of a new product range by the lender for large Houses in Multiple Occupation (HMO) and multi-unit freehold blocks (MUFB), designed to cater for properties with seven to 10 bedroom or units.
Mansfield Building Society added lending to limited companies and expats to its holiday let offer. In addition to expanding its holiday let borrower types, Mansfield also increased the maximum LTV from 70 per cent to 75 per cent for holiday lets and its maximum loan size to £1mn for BTL.
The new holiday let mortgages, available to both individual landlords and Special Purpose Vehicle (SPV) limited companies, include a two-year discounted rate at 3.59 per cent variable and five-year fixed rate at 4.09 per cent.
Expats needing a holiday let mortgage will also be able to access a two-year discount at 4.19 per cent variable and a five-year fixed rate at 4.69 per cent.
West One Loans became the first lender to introduce a green second charge mortgage for landlords available on properties with an EPC rating between A to C.
The new green product is set at the lender’s lowest ever rate for BTL second mortgages starting from 5.29 per cent. In addition, the lender has created a new, second charge BTL plan called BTL Plus with rates starting at 5.39 per cent.
Fleet Mortgages launched seven-year fixed rates in all three of its core BTL ranges, which are standard, limited company and Limited Liability Partnership, and HMO/MUFB.
Advisers now have access to the new 75 per cent LTV products, available for purchase and remortgage, with standard and limited company/LLP options priced at 3.29 per cent, and HMO/MUFB priced at 3.59 per cent.
The products are available with a minimum loan of £25,001 up to £1mn and come with a rental calculation of 125 per cent at 3.29 per cent for standard and limited company and 125 per cent at 3.59 per cent for HMOs.
In terms of product changes, Accord Mortgages modified its BTL mortgage offering. The new range includes rate cuts on selected two-year products at 65 per cent LTV of up to 0.09 percentage points.
This includes a two-year fixed rate at 2.51 per cent, it was previously 2.6 per cent, available for remortgaging, which comes with a £495 fee, free remortgage legal service and free standard valuation.
The intermediary-only lender also reduced rates on selected products at 75 per cent LTV for landlords looking for two-year and five-year terms.
These include a five-year fix at 2.49 per cent, formerly 2.55 per cent, available for both house purchase and remortgage. It comes with a £1,995 fee, £250 cashback and free standard valuation.
Market Financial Solutions cut rates across both its BTL mortgage range and bridging loan products. The specialist lender’s BTL mortgage rates now start from 3.29 per cent, down from 3.79 per cent.
Finally, Clydesdale Bank has updated its BTL mortgage range with selected BTL 60 per cent LTV rates increasing by 0.15 percentage points.
This offers a good flavour of the breadth of activity on show across a BTL market which continues to demonstrate its flexible yet complex nature.
Clydesdale Bank ups select rates by up to 0.2 per cent
In an update to brokers, the lender said that rates for two and five-year fixed rates between 75 and 90 per cent LTV would rise by up to 0.2 per cent.
This includes its no-fee two-year fixed rate at 90 per cent LTV, which has risen from 2.54 per cent to 2.74 per cent.
Its five-year fixed rate at the same LTV and with no-fee has risen from 2.75 per cent to 2.81 per cent.
Selected BTL products at 60 per cent LTV will also go up by around 0.15 per cent, including its five-year fixed rate which has gone from 2.29 per cent to 2.44 per cent.
It added that two and five-year fixed rates between 65 and 85 per cent LTV for loans over £1m would be upped by up to 0.1 per cent.
Two and five-year fixed rates in its professional and newly qualified professional range will be increased by up to 0.16 per cent.
Clydesdale Bank ups high LTV, professional and discount offset rates
Rates for two and five-year fixed products between 75 and 90 per cent LTV will rise by 0.09 per cent.
Clydesdale’s two-year fixed fee-saver product at 75 per cent LTV and 85 per cent LTV have also increased by 0.09 per cent to 2.5 per cent and 2.54 per cent respectively.
Five-year fixed rates at 80 per cent LTV, with both £1,499 and £999 fees, will increase by 0.03 per cent. For instance, its five-year fixed rate with £999 fee is now 2.3 per cent.
Five-year fixed rates at 90 per cent LTV with a £999 fee have gone up by as much as 0.11 per cent. This includes its five-year fixed rate with £999 fee which has risen to 2.6 per cent.
The lender has also increased the rates for professional and newly qualified professional borrowers looking for two and five-year fixes by up to 0.09 per cent.
Clydesdale Bank added that its discounted offset rates have increased by 0.25 per cent, which is in-line with its offset variable rate which stands at 5.2 per cent.
Clydesdale and Platform hike up rates – round-up
Changes include its two and five-year fixed mortgages at 75 and 80 per cent LTV, with a £999 fee. These are available to both new and existing customers and have received rates increases of up to 0.34 per cent.
At 75 per cent LTV, two and five-year fixes will see rate increases of up to 0.37 per cent, and uplifts of up to 0.35 per cent have been made at 80 per cent LTV.
For 95 per cent LTV deals, two and five-year fixed rates have gone up by as much as 0.31 per cent.
Mortgages for buy-to-let borrowers at 60 per cent LTV will be increased by up to 0.25 per cent. These changes will apply to two and five-year fixes.
Products at 65 per cent LTV for loans of £1m or more will go up by 0.2 per cent for two and five-year fixes.
Clydesdale has also withdrawn its broker exclusive 90 per cent LTV fixes with a £1,999 fee for existing customers.
Platform, the intermediary arm of the Co-op Bank, has increased fixed, variable and reversion rates.
Following the Bank of England’s decision to raise the base rate to 0.75 per cent, Platform has in turn increased its standard variable rate to 4.99 per cent.
Across mortgages for new and existing customers, two, three and five-year fixed rates have increased by up to 0.30 per cent.
Two-year tracker mortgages have been hiked up by 0.25 per cent to reflect the base rate change.
For professional mortgages, two and five-year fixed rates have gone up by as much as 0.22 per cent.
The buy-to-let mortgage reversionary rate at 70 per cent LTV has increased to 5.25 per cent and at 75 per cent LTV has gone up to 5.75 per cent.
Two and five-year fixed rates have increased by up to 0.16 per cent and two-year fixed premier products have risen by the same. This also applies to buy-to-let product switches.
For borrowers purchasing through Help to Buy, two, three and five-year fixed rates have increased by up to 0.27 per cent.
Clydesdale and Santander raise rates – round-up
Clydesdale said its new charges for residential and buy-to-let products would take effect on Thursday evening while Santander said the increases across its new business range would start on Friday.
Clydesdale had informed brokers that it was raising rates for residential and buy-to-let products, as well as its £1m-plus two and five-year fixed rates by as much as 0.25 per cent.
The lender said its core 75 per cent loan to value (LTV) two and five-year fixed rates will be increased by up to 0.09 per cent. Selected professional and newly qualified professional two and five-year fixed rates will increase by up to 0.26 per cent.
Meanwhile two-year fixed buy-to-let deals at 60 per cent LTV will rise to 1.89 per cent.
It urged brokers considering one of its products for clients to apply as soon as possible.
Santander reintroduced residential mortgages at 60 per cent LTV and said some two and five-year fixed rate products would be matched at 60, 75 and 85 percent LTV.
The £250 cashback incentive offered on two and five-year fixed residential mortgages will now be removed on the majority of applicable products and the bank has “temporarily” withdrawn all its residential fixed rate remortgage offers that carried no product fee.
In addition, it said the LTV limit on larger loans was being reduced to 70 per cent.
For remortgages, its 75 per cent LTV, two-year fixed rate will rise 0.15 per cent to 2.09 per cent; its 85 per cent LTV, two-year fixed rate will shift to 2.14 per cent, up 0.15 per cent; its 75 per cent LTV, five-year fixed rate will increase by 0.10 per cent to 2.09 per cent; and its 85 per cent LTV, five-year fixed rate goes up to 2.14 per cent, or 0.10 per cent higher. All require a £999 fee.
Similar increases were in store for help to buy loans.
For example, Santander’s 75 per cent LTV, two-year fixed rate will rise 0.15 per cent to 2.29 with no fee; its 75 per cent LTV, 2.5-year fixed rate will jump 0.15 per cent to 2.14 per cent with a £999 fee and £250 cashback removed. The 75 per cent LTV, five-year fixed rate will go up 0.10 per cent to 2.14 per cent with a £999 fee and £250 cashback removed; and its 75 per cent LTV, five-year fixed rate with no fee will increase by 0.10 per cent to 2.29 per cent.
Santander also announced increases across its larger loan, new-build and buy-to-let ranges and said it would withdraw two and five-year fixed buy-to-let deals at 60 and 75 per cent LTV.
The lender said full details on its new business mortgage range would be available on its website on Friday.
Clydesdale Bank ups rates
The changes include increases of up to 0.27 per cent across selected 75 per cent loan to value (LTV) two and five-year fixed rates and rises of as much as 0.19 per cent across two and five-year fixes at 80 per cent LTV.
Selected two and five-year fixed mortgages at 90 per cent LTV will increase by as much as 0.15 per cent.
The increases came weeks after the Bank of England (BoE) rose its base interest rate to 0.5 per cent, its second increase in three months.
The BoE said it acted out of concern that higher energy costs would lead to a surge in inflation above seven per cent by April. Results of the bank’s next Monetary Policy Committee meeting were scheduled to be announced on 17 March.
A spokesperson for Clydesdale Bank said: “Like all lenders we constantly keep rates under review and these changes reflect the wider environment.”
TSB raises maximum loan sizes; Clydesdale amends new-build criteria – round-up
For amounts above 75 per cent LTV, the most TSB will lend is £500,000.
This follows the bank’s decision to raise the maximum loan on residential mortgages up to £750,000 between 85 and 90 per cent LTV.
TSB has also withdrawn its five-year fixed rate mortgages up to 85 per cent LTV with five-year early repayment charge periods.
Changes apply from today.
Clydesdale changes new-build criteria
Clydesdale Bank has amended the new-build criteria to accept cash incentives of up to five per cent of the purchase price up to 90 per cent LTV.
This includes cashback deals, stamp duty contributions and payment of professional fees. The lender will also accept non-cash incentives without impacting the loan amount.
Elsewhere, Clydesdale has reduced the minimum income for newly qualified professionals from £40,000 to £30,000. Borrowers applying for a newly qualified professional product may be eligible for borrowing amounts of up to 5.5 times income.