Virgin Money and several other lenders reduce interest rates
Leeds Building Society is changing the way it assesses affordability by cutting stress testing rates by up to 1.24%, following updated guidance from the Financial Conduct Authority (FCA).
The change, effective tomorrrow, June 27, is expected to boost borrowing capacity for a wide range of customers, including first-time buyers, movers and those remortgaging.
According to the mutual, typical applicants could borrow between £9,000 and £34,000 more under the new rules.
The move follows the recent launch of its Income Plus range, which allows first-time buyers with a household income of at least £40,000 to borrow up to 5.5 times their earnings.
“We welcome the recent clarification on lending rules by the FCA which will allow us to support more people onto and up the property ladder and support the government’s plan for growth,” said Andy Moody, chief commercial officer at Leeds Building Society.
“Stress testing requirements have unduly held some borrowers back from achieving their home ownership aspirations, so we are pleased to be able to lend up to £34,000 more to our customers as a result of these changes in affordability assessments.”
Meanwhile, other lenders across the UK have also made moves to improve borrower access through mortgage rate cuts.
Virgin Money has reduced selected fixed rates by up to 23 basis points (bps), with two- and three-year product transfer rates starting from 3.86% and five-year fixes from 3.93%. The bank also trimmed remortgage and buy-to-let pricing and introduced new purchase exclusives at 75% and 80% loan-to-value (LTV) bands.
Atom bank has lowered rates on its near prime residential mortgage range by up to 20bps, with five-year fixes now starting at 5.04%. The digital lender said that over 70% of its near prime customers transitioned to prime products at the end of their term over the past year.
In the bridging market, United Trust Bank (UTB) and London Credit have both announced pricing reductions.
UTB has cut interest rates by up to 15bps on regulated and unregulated bridging loans, with monthly rates now starting at 0.70% for high-value loans. The bank also expanded its criteria, increasing LTV limits and offering more flexible refurbishment options.
London Credit made reductions of up to 60bps on commercial and semi-commercial bridging loans, with rates now starting at 0.66% for residential, 0.74% for semi-commercial, and 0.80% for commercial products. The lender said the sharper pricing was aimed at giving brokers more competitive solutions in time-sensitive and complex cases.
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