The Ipswich Building Society has launched six new mortgage products aimed at helping borrowers who are unable to access the wider mortgage market – so called ‘mortgage prisoners’.
This follows industry-wide affordability stress tests introduced in 2014.
The Society’s like-for-like mortgage range utilises existing regulation to offer a lower affordability assessment on application, calculated at product pay rate only and not at a stressed rate. This is available for mortgage holders who would benefit from this more flexible approach to the affordability assessment which is made possible under the current rules.
Applicants must have been with their lender for two years or more, be up to date with their repayments, and must not be borrowing additional funds.
Richard Norrington, CEO at Ipswich Building Society, said: “Back in 2014, we were among the first lenders to actively use the FCA’s new Mortgage Market Review transitional arrangements regulation introduced to enable homeowners to switch to a new provider.
“Whilst the FCA is currently consulting on changes to mortgage assessment criteria, responsible lending rules will not come into effect until the end of the year and are partly targeted at helping mortgage prisoners.
“We recognise that there is also a tranche of homeowners who currently find themselves unable to remortgage away from their current lender due to changes in affordability assessment processes, and who cannot wait for the new legislation. That’s why we’ve developed and introduced our new like-for-like remortgage range, to provide greater opportunity for these borrowers.”