Mortgage roundup – a host of opportunities for borrowers

This mortgage roundup highlights the latest updates and features from the UK’s leading lenders, from custom-build mortgage products and holiday let mortgages, to criteria for interest-only borrowers.

New range of self and custom-build mortgages launched by BuildLoan

BuildLoan has announced a new range of self and custom build mortgage products in conjunction with Bath Building Society.

The four new products replace the society’s existing range with initial rates 0.25% below the previous equivalent products, reducing its lowest rate from 3.90% to 3.65%.

All products have advance stage payments, meaning stage releases throughout the build are agreed at the outset, linked to the costs of each build stage and not subject to valuation by the lender during the build.

Funds are released before each stage of work which provides an excellent solution for self-builders with fewer funds and those using carbon-friendly construction methods such as timber frame, where costs tend to be more weighted towards the start of the build.

The new range provides up to 95% on land and build costs. Example products include:

• Two-year discount rate of 3.65% (SVR – 1.25%) with a maximum LTV of 80%

• Two-year discount rate of 3.85% (SVR – 1.05%) with a maximum LTV of 85%

Chris Martin, head of product development and underwriting at BuildLoan, comments: “These new products offer great features for self-builders, particularly those needing to borrow a higher proportion of their build costs or needing funds up-front to pay for a build system such as a timber frame.”

“The stage payments are agreed at application stage based on build costs which take away the uncertainty of products where stage releases during the build are subject to a valuation of the site by the lender.”

Ben Hutchings, mortgage sales manager at Bath Building Society, adds: “We recognise that cash flow is vital to self-builders which is why all of our products offer up-front guaranteed stage payments linked to the cost of each element of the building project.”

“These features are incredibly important to clients to help them complete their build successfully within their planned timescale.”

Cambridge cuts rates and bolsters holiday let mortgage range

The Cambridge Building Society has added a new two-year fixed-rate mortgage and reduced interest rates and completion fees across its holiday let mortgage range.

The new product is a two-year fixed rate at 3.69% up to 75% LTV.

The Cambridge has also reduced the rate on its five-year fixed-rate mortgage from 4.00% to 3.79% and its two-year discounted mortgage from 3.39% to 3.34%.

There are no application fees and completion fees have been reduced from £1,500 to £999 across the range.

In addition, the mutual now uses an average of the projected low, mid and high season weekly rental yields, multiplied by 30 weeks to calculate the annual rental income.

The Cambridge’s head of lending, Tracy Simpson, says: “We’re excited to add another great product to our range of competitively-priced holiday let mortgages, as well as making it cheaper for customers to complete.”

All loans are 75% LTV, between £50,000 and £500,000 and are available for purchase, remortgage, product switches and further advances.

All mortgages from The Cambridge are available on properties across England and Wales.

SoMo offers 90% off valuation costs ahead of Black Friday

Bridging loan firm SoMo has announced an early Black Friday Weekend that will give borrowers a 90% refund on valuation costs over a 24-hour period.

To qualify, deals must be locked in and paid for before midnight on Sunday November 21 and SoMo Family members get exclusive access from Thursday November 18.

With the average cost of valuations on the up, there’s a huge saving to be made as part of the unmissable limited time offer.

SoMo ran this same Black Friday offer in 2019, which resulted in one of its busiest days of the year, with brokers using the incentive as a very real borrower reward.

Commenting on the promotion, SoMo’s managing director Jamie Jolly says: “The last time we ran our Black Friday Event, our BDM’s phones were ringing off the hook. We locked in a record number of deals within the 24-hour window, without compromising the high-quality customer service of SoMo, which is always our priority.£

“We want to make sure all our customers are getting the best deals from SoMo and this includes our borrowers. This limited-time only deal is to say a big thank you to them.”

Last month SoMo announced an ambitious lending target of £250 million over the coming 12 months. To help reach this target the Greater Manchester-based firm will be opening new premises in London. The new office will have a dedicated London-based underwriting team with experience and expertise in the highly competitive London bridging space.

Jolly continues: “We’ve had a very successful year, lending more this year than we ever have in a calendar year, and we want to end 2021 with a bang.”

Hope Capital launches Finish & Exit bridging loan product

Specialist short-term lender Hope Capital has launched a brand-new product that enables borrowers to complete their residential development.

The Finish & Exit bridging loan product provides up to 75% LTV, with rates starting from just 0.70% per month and is suitable for projects where the development has still not been finished perhaps owing to a project overrun or material supply issues being encountered.

The news of the latest product compliments the launch of Hope Capital’s Development Exit loan in September, which is designed for completed developments.

The minimum loan amount on the Finish & Exit bridging loan product is £70,000 and goes up to a maximum of £5 million, which is available on residential property developments located in England and Wales.

Loan terms are from 3 to 18 months with this product being designed to be flexible around the needs and circumstances of the individual borrower and their specific project(s).

The new loan enables borrowers to undertake light to heavy refurbishment projects, with drawdowns being available. Alternatively, it can be used to repay existing finances and complete any outstanding works.

Roz Cawood, director of sales at Hope Capital, comments: “The Finish & Exit bridging loan says what it does on the tin: finishing up projects before exit.”

“We decided to launch this product after noticing there were a significant number of investors and developers who required funds to finish a development to pay off their existing development loan.”

She adds: “The Finish & Exit bridging loan provides the borrower with much needed additional breathing space and relieves any pressure to pay outstanding capital back to the lender if they are unable to do so on time.”

The product follows the launch of Hope Capital’s Development Exit loan in September, with rates starting from just 0.69% per month and 80% max LTV. This product enables borrowers in a position where their completed residential development is prepared for sale, to switch to a short-term, possibly lower-cost, funding option.

Cawood, continues: “At Hope Capital, we make it our mission to regularly review the market, listen to our brokers and their clients, to see what the demand is, so we can create and deliver innovative bridging loan solutions to meet a diverse range of borrower’s needs. The Development Exit loan has already received a significant number of enquiries, so we are confident the Finish & Exit loan will generate a similar response.”

Vernon refreshes range with new 80% LTV fixed rates

Stockport’s mutual, Vernon Building Society, has added two new fixed-rate mortgages to its residential range.

The new products include a two-year fixed-rate at 1.99% with a £1,499 fee, and a five-year fixed-rate at 2.25% with a £999 fee.

Both mortgages are available up to 80% loan to value for purchases and remortgages.

Brendan Crowshaw, head of mortgage and savings distribution at Vernon, states: “We’ve recently seen a lot of interest in fixed rates from those looking to lock into today’s competitive rates before any potential interest rate rises. We’ve boosted our range in response to that demand with these two 80% LTV options.”

“We now have a wide range of mortgage options available to those with small, medium and large deposits and all borrowers benefit from Vernon’s common-sense approach to underwriting, even if they have non-standard needs or circumstances. We always look for a way to say yes.”

The new mortgages are available as of November 9 via intermediaries and direct from the lender.

Accord improves criteria for retired interest-only borrowers

Accord Mortgages is updating its criteria this week to better support residential interest-only borrowers who are already retired or whose mortgage term would take them into retirement.

As of October 27, Accord will consider interest0only lending for borrowers who are already retired and want to use pension income to help with affordability, as long as the customer is no older than 70 years of age when the interest-only term ends.

Retired borrowers not using pension income however can be up to 80 years of age at the end of the mortgage term.

Borrowers planning to retire during the term of their mortgage can also be considered for an interest-only term into retirement, if their income is not being used for affordability.

Accord will also consider joint interest only applications, where one borrower is retired or plans to retire during the mortgage term, as long as the second borrower will not be retiring at any point in the term, and can support the application’s affordability.

All interest-only borrowers will still need to have a suitable repayment vehicle in place to repay the capital on their mortgage at the end of the mortgage term.

Nicola Alvarez, senior manager for new propositions at Accord, says: “We’re really pleased to be expanding our common-sense lending criteria to better support those who have taken early retirement or who plan to retire during their mortgage term.”

“These changes give borrowers greater flexibility to fulfil a better retirement thanks to lower monthly repayments and we’re sure brokers will welcome being able to offer more options to clients in this position.”