The lender has cut the rates on 15 lower LTV products, and the rate changes follow from reductions to its higher LTV products of up to 0.2 per cent last month.
Highlights of the latest changes include a reduction on its two-year fixed 60 per cent LTV product, which has been cut by 0.1 per cent to 1.04 per cent. This product is subject to a £999 fee.
The lender’s equivalent two-year fixed 60 per cent LTV feesaver product has also been reduced by 0.1 per cent to 1.29 per cent.
HSBC’s two-year fixed at 75 per cent LTV with a £999 fee has been cut by 0.05 per cent to 1.29 per cent, whilst its equivalent feesaver product has been slashed by 0.15 per cent to 1.59 per cent.
The lender’s five-year fixed at 60 per cent LTV with a £999 fee has been reduced by 0.05 per cent to 1.19 per cent, whilst its feesaver five-year fixed at 60 per cent LTV is down by 0.05 per cent to 1.49 per cent.
HSBC UK’s head of buying a home Michelle Andrews (pictured) said: “Whether customers have a larger or smaller deposit, recent cuts to mortgage rates across all LTVs will be welcome.
“Plus, with the Stamp Duty Land Tax tapering down at the end of the month, these cuts will make getting onto or moving up the property ladder more affordable, possibly being the difference in a home buyer being able to afford the property of their dreams,” she added.
The changes are effective from today, with the largest increases applied to some of its feesaver products.
The rate on its five-year fixed feesaver 85 per cent LTV will be cut by 0.2 per cent to 2.79 per cent. The two-year fixed feesaver 85 per cent LTV product will be reduced by 0.15 per cent to 2.64 per cent.
The lender’s two-year fixed rate feesaver 90 per cent LTV product will decrease by 0.15 per cent to 2.09 per cent.
The lender has also cut rates on several of its £999 fee products. The rate on the five-year fixed 85 per cent LTV product was reduced by 0.15 percent to 2.59 per cent, and on the two-year fixed 85 per cent LTV by 0.15 per cent to 2.64 per cent.
The rate for its two-year fixed rate 90 per cent LTV will decrease by 0.1 per cent to 2.89 per cent.
Michelle Andrews, head of Buying a Home at HSBC UK said: “These mortgage cuts across 85 per cent and 90 per cent LTVs will make it cheaper for those with a smaller deposit to get onto or up the property ladder.”
Aldermore introduces remortgage products and cuts 75 and 80 per cent LTVs
Aldermore has announced that it has reduced rate across a range of its purchase and remortgage products at 75 per cent and 80 per cent loan to value (LTV), and added several new remortgage products.
The lender has introduced four new remortgage products which had no product fee and free standard legal and valuation fees.
This includes a two-year and five-year fixed, at 75 per cent LTV, with rates of 3.48 and 3.78 per cent respectively.
The lender also brought in two-year and five-year fixed rates, at 80 per cent LTV, at 3.68 per cent and 3.98 per cent respectively.
Aldermore’s head of mortgage distribution Jon Cooper (pictured) said: “With the reintroduction of these remortgage products, we’re delighted to be providing a greater amount of choice to homeowners looking to secure a better deal or reduce monthly payments to release funds to be put towards other large expenses on the horizon such as home renovations.”
The lender has also reduced rates on four of its purchase and remortgage products – which are subject to a £999 fee – by 0.3 percent.
Its two-year at 75 per cent LTV will now be 3.18 per cent, whilst its five-year fixed rate will be 3.38 per cent.
The rates for its two-year and five-year fixed at 80 per cent LTV will stand at 3.48 per cent and 3.68 per cent respectively.
Cooper added: “The pandemic has accelerated the increasingly broad set of financial circumstances that borrowers have, so we want to be inclusive and responsive to this long-term trend.
“It is important to give opportunity to the widening number of people that may have complex income streams or credit issues in the past so that they can find a product that suits their individual circumstances.”
Last week, the tax department said there could be delays of more than a month to issue a tax year overview (TYO) for the self-employed if they had taken out a Self-Employment Income Support Scheme (SEISS) grant.
This is opposed to the usual 24-72 hour turnaround to receive the TYO. The department put this down to incorrect returns being filed by taxpayers.
Nationwide said while it sympathised with borrowers facing hold ups receiving their documentation, it added: “this is an essential document that we require as part of the application process and mortgage offers are not issued until all of our requirements are met.”
The building society said the presence of a Covid-related loan or grant would not be a reason to decline an application but said if a borrower was reliant on such income it would need to consider their long-term affordability in addition to the TYO.
Nationwide’s spokesperson continued: “In some cases, to support a lending decision we may request additional information such as accounts and business bank statements.”
Virgin Money said it was accepting self-employed borrowers who had taken an SEISS grant and said the majority were using previous year’s accounts for affordability.
Although it had seen a few borrowers insist on using their 2020/21 accounts, there were no issues as they had always had their TYO to hand, it said.
A spokesperson for Virgin Money added: “If there was an issue with a self-employed application, we’d work with the customer to understand what alternative income proofs were available and how we could help.”
HSBC appeared to be taking a similar approach, as it said: “We will review each case that is affected by this issue individually.”
NatWest said because it was not currently lending to those who had applied for a grant after 14 July, it was not seeing any hindrances with documentation.
However, a spokesperson for the bank said: “As a responsible lender this is part of the bank’s affordability criteria, however we are currently reviewing our policies for self-employed customers who have applied for a SEISS grant and looking to update our policies and affordability calculators in the near future to better support these customers.
“We do continue to consider other forms of income to support an application for self-employed customers, i.e. rental, employed income or other businesses.”
Barclays confirmed it was accepting mortgage applications for those who had taken a SEISS grant but did not respond to queries over how it would handle any related delays, should they occur.
Santander reaffirmed it would discount self-employed figures from 2020/21 and consider accounts from 2018/19 and 2019/20 instead in cases where borrowers had suffered a drop in income or received a grant under the SEISS.
It did not say what it would do if borrowers chose to use figures from 2020/21.
This includes its two-year fixed mortgage at 95 per cent LTV with a £999 fee. This has been cut from 3.99 to 3.74 per cent and the fee-free equivalent has been reduced from 4.29 to 3.99 per cent.
The 90 per cent LTV two-year fixed with a £999 is now priced at 2.99 per cent after a 10 bps reduction.
Two and five-year fixed mortgages at 80 per cent LTV have been reduced by 0.10 per cent.
A five-year fixed product at 75 per cent LTV with a £999 has been cut to 1.54 per cent. Meanwhile, at 60 per cent LTV, the five-year fix with a £999 fee has been reduced to 1.24 per cent while the fee-free option has been cut to 1.54 per cent.
The bank continued on its drive to roll out to the whole broker market with the addition of more than 100 firms in the last eight weeks.
HSBC also said it completed more mortgages in March than in any previous month it had offered home loans, including 3,000 mortgages for first-time buyers.
Michelle Andrews, HSBC UK’s head of Buying A Home, said: “It has been an incredibly busy time for us, and we have seen all of this with lockdown measures still in place. I am extremely proud of my teams who are delivering customer-focused service on a daily basis.
“This gives me great hope for HSBC UK providing a greater share of mortgages, and hope and excitement for the mortgage and housing markets post-lockdown.”
The Nottingham returns to 95 per cent LTV lending
The Nottingham has added a 95 per cent LTV product to its range as part of its re-entry into low deposit lending.
The mutual withdrew from the mortgage market completely in September before slowly returning earlier this year, with its most recent launch being 90 per cent LTV mortgages.
The 95 per cent LTV is a five-year fix with a rate of 4.1 per cent. It offers a free valuation and free legals for remortgages.
Nikki Warren-Dean, The Nottingham’s head of intermediary sales, said: “A year on from last lending at 95 per cent LTV we are pleased to have this product available, and hope it appeals to first-time buyers with a lower deposit looking to get on the property ladder.”
Warren-Dean also warned on the product’s availability and cautioned it may pulled at short notice.
She added: “We’re expecting this product to be popular so our message to brokers is to submit well-packaged cases to us as soon as possible.
“No matter who the lender is, product ranges can change at relatively short notice, particularly in the current climate, so we would encourage brokers who have an accepted decision in principle to submit a full application at their earliest convenience.”
Vida launches limited edition mortgages
Vida has released limited edition residential mortgages at 85 per cent LTV.
The mortgages are eligible within its Vida 1 range for borrowers with minor credit impairments.
There’s a two-year fixed set to 4.09 per cent and a five-year fixed priced at 4.24 per cent. The products are available for purchase and remortgage with a maximum loan size of £500,000.
The lender is also launching fee saver products to the Vida 1 range up to 70 per cent LTV, including a two-year fixed with a rate of 3.59 per cent and a five-year fixed at 3.74 per cent.
These mortgages are fee-free and have a £49 assessment fee. The maximum loan sized offered is £350,000 and the lender will carry out a free valuation on properties worth up to £500,000.
Richard Tugwell, director of mortgage distribution at Vida, said: “Although there are reasons for optimism, the Covid-19 pandemic has had a huge impact on the financial circumstances of millions of people across the UK.
“The long-term implications of the crisis mean there is a new generation of borrowers with impaired access to credit who will need the support of specialist lenders to help them despite their complex situations.”
He added: “Our new product launches today are another step in achieving this, and we’re confident that these offerings are a great solution to help borrowers who have smaller deposits or who find that the costs associated with home buying restrict their home ownership plans.”
The lender is launching a pair of two-year and five-year deals with £999 fee and zero fee options.
Rates are 3.99 per cent and 4.29 per cent for the two-year mortgages and 4.29 per cent and 4.49 per cent for the five-year versions.
The range is available through advisers and direct with the bank.
HSBC UK head of buying a home Michelle Andrews, said: “We have supported home buyers and the wider housing market throughout the pandemic and are excited to support the mortgage guarantee scheme.
“After such a turbulent year it is great that this scheme will make a real difference in enabling first-time buyers who didn’t think they would have a chance of getting a mortgage and home movers to get the keys to their new home.”
The government scheme covers properties of up to £600,000 for first-time buyers and current homeowners with a five per cent.
In fact, close to 10 per cent of digitally active HSBC UK customers are using Open Banking services, with the number growing all the time.
We have been looking at how we can integrate this fantastic technology protocol.
We have seen applications across current accounts and unsecured lending products, where it has made a real difference making life quicker, easier and safer.
And I am extremely excited to now see Open Banking being integrated into our mortgage process in a small but important way that will see the time it takes to go through the underwriting process being much reduced for self-employed applicants.
It will mean they don’t have to go through the hassle of digging out and wading through months’ worth of paperwork which would then need to be submitted either electronically or by post.
After all, as the famous business saying goes “time is money”, and who wants to be doing admin for a mortgage application when you can be running your business, or utilising that time with more fun pursuits?
Let Open Banking take the strain.
We are partnering with Experian on this initiative to speed up the mortgage process for self-employed customers.
The mortgage applicant must be with one of the twenty providers that allow data sharing, a list that, as you would expect in this day and age, includes all the big names and most popular providers.
Why are we doing it?
The simple answer is that it will make a positive difference.
The effects of Covid-19 have been seen far and wide, and literally everyone, self-employed or not, has been affected in some way, shape or form.
Each industry is different and each business within them is different. The landscape for many had changed significantly, so in some cases we needed to ask for a bit more information from self-employed customers to make sure we’re lending appropriately.
This had a knock-on effect whereby in some cases we needed to go back to the broker and ask for more information before completing an assessment. That added time to an application.
When that was done the case would be ready for review and of course with the extra information required, it naturally takes more time for an underwriter make a reasonable assessment of the application. Or it did.
Open Banking provides the customer and broker with a quicker and easier way of supplying business bank statements which eradicates errors and significantly speeds up our ability to assess what those bank statements are telling us.
Time saved
When you have a scale business, assessing thousands of applications every week, every minute saved in manually wading through additional statements can then be re-invested in getting to the nub of the lending decision and speeding up the lending process overall.
We are very conscious of concerns about the access to information and Open Banking is a very closely regulated process.
But we recognise that customers and brokers alike will have some natural reservations while wider adoption of the technology becomes more the norm.
With the customer’s authorisation we only extract, retain and use the data that is required for this agreed purpose and no other data is held or used by HSBC.
Priority for Open Banking cases
The benefits of using Open Banking this way are easy to see and it is absolutely vital we all embrace this new technology as it clearly signposts the future of self-employed underwriting.
But it also has much wider practical applications to simplify the way we operate.
As an added incentive HSBC will prioritise those self-employed applications that use Open Banking to demonstrate affordability.
We’ll obviously have to wait and see how the take up of Open Banking for self-employed customers goes over the next few months.
However as the technology gains traction with customers and the benefits become plain to see, HSBC will continually assess how to widen its practical development across the business.
In the bank’s latest round of rate cuts, the cost of 20 deals have been reduced by up to 0.1 per cent spanning 60 to 90 per cent LTV deals.
Highlights from the rate cuts include an 85 per cent LTV five-year fixed rate, with a £999 fee, down 0.10 per cent to 2.74 per cent. The fee saver equivalent has been reduced by 0.1 per cent to 3.04 per cent.
At 75 per cent the bank has cut the two-year fixed rate, with a £999 fee, by 0.10 per cent to 1.39 per cent.
Earlier this week HSBC increased the lending limit on its 85 per cent LTV range by 50 per cent to £750,000 while the maximum lending cap on 90 per cent deals has been lifted from £400,000 to £550,000.
And the lender also revealed at Mortgage Brain’s Mortgage Vision event that it planned to open up its mortgage range to the entire broker market this year. Currently the bank’s deals are available to around 300 intermedaries.
HSBC UK head of buying a home Michelle Andrews said: “There are lots of different elements to consider when looking for a mortgage to get onto or up the property ladder.
“Two big considerations are interest rate and how much you can borrow, and these changes will make a big difference.”
HSBC has committed to offering 95 per cent LTV mortgages through the government-backed mortgage guarantee scheme, with this expected to launch in mid-April.
Presenting at Mortgage Brain’s Mortgage Vision Masterclass, Paul Norgate, head of north region at HSBC, said: “We have a plan to go whole of market this year. In terms of firms, we’re up to in excess of 320-odd firms now which gives us coverage to a large part of the intermediary market.
“Our plan is to roll that out certainly in the next few months to give us that whole of market proposition.”
Intermediary operations enhanced with Open Banking
Norgate also said the bank had added to its underwriting and business development team so was prepared for a busier market due to the extended stamp duty holiday deadline and the return of 95 per cent loan to value (LTV) mortgages through the government-backed scheme.
He said: “Capacity doesn’t concern us, we’re geared up to deal with it.”
Norgate also said the launch of its Open Banking proposition on 8 March would have a positive impact on case timescales and added: “This is something we should embrace rather than fear or avoid.”
Additionally, HSBC plans to prioritise self-employed clients when relying on Open Banking for mortgage applications, to keep up with changes to criteria and circumstances.
“Potentially we might see change to our self-employed credit policy, as will many lenders – I’m not saying that’s going to happen but if it does, the Open Banking piece will futureproof us.
“So, we won’t have to keep going out and say, ‘now we need this, now we need something different’ because Open Banking will pull all that detail for us,” he added.
From today, lending limits at 85 per cent LTV range have been increased from £500,000 to £750,000.
Meanwhile, in the 90 per cent LTV range the lender will now consider loans up to £550,000, up from £400,000.
Rates on the products start at 2.54 per cent for a two-year fix at 85 per cent LTV with a £999 fee and 3.14 per cent for the reciprocal five-year fix.
Last month the lender announced it had completed £24bn of new mortgage lending in 2020 – up £3bn on its 2019 total.
This made it the fifth biggest lender in the UK mortgage market last year.
