There is hope for the mortgage prisoners of the West Midlands, one major building society the Nationwide has reduced its affordability calculation on its mortgages. Hopefully this has set a precedent and other lenders will follow, really opening up the market to thousands of clients who are at the moment stuck with a certain mortgage product. This mortgage could be with an institution that now no longer lends out mortgage funds to clients. So the client is essentially trapped with a particular mortgage because they do not meet the current lending criteria in 2020.
The Nationwide building society has reduced the income threshold that clients need to earn to meet the new criteria this has been reduced by around 30%. However re-mortgage clients cannot borrow more than their current mortgage balance. They have reduced their stress test to 1% over the standard variable rate which was previously 3%, what this means is that the standard variable rate goes from 4.24% and now becomes 5.24% instead of 7.24% 2% lower. This brings the monthly affordability roughly down by £100 per month on a £100,000 mortgage with a 25% deposit.
This will help certain mortgage prisoners, no all but it is a step in the right direction. Please have a look at Wolverhampton mortgage prisoners part 1 my previous post. One point is that it indicates the fact that lenders are positive about the bank of interest rate staying low in the medium to long term. If you would like a free chat about your circumstances and a professional recommendation on a mortgage or bridging product to suit your needs, call Paul on 01902 213201