A lender offers mortgages with which customers can borrow their income up to seven times on 10 and 15-year-old fixed tariff products.
April Mortgages has launched his ‘Enhanced Loan-To-In-In-In-In-In-In-In-In-In-Income (LTI) criteria’ to help borrowers that are confronted for affordability challenges.
Most lenders usually offer mortgages for amounts that are 4.5 times the income of borrowers. There are some lenders who make it possible to borrow with a plural with a higher income, with Rural Some customers offer their income six times. However, they are limited in how many mortgages of this type they can offer.
The increased loans from April is available for applicants with a family income of £ 50,000 or more, with up to 85% loan-to-value (LTV) with other words, borrow on 85% of the value of the property.
It comes as the latest data from the British home price index, shows that buyers are currently paying £ 268,000 for a typical house. April said that this underlines the growing pressure on the affordability of the borrower.
It explained with seven times income and 80% LTV for a period of 36 years, a household that earned £ 60,000 annually, had access to a mortgage of almost £ 420,000 with its offer. This, it explained, was considerably more than the standard 4.5 times cap that was usually applied by most High Street -money lenders.
What are the advantages and disadvantages of long-term mortgages?
Borrowers who close these deals must hold the rate offered for 10 or 15 years, which offers less flexibility than most mortgages.
April said that this long -term model with a fixed rate yielded more stability and predictability for repayments.
In addition to the disadvantage, however, this also means interest rates During this time. If they left the product early, they would deliver early repayment costs.
These mortgages are only available through brokers, who have welcomed the new additions to the mortgage market. Some have given advice about what borrowers should consider before they close one of these deals.
Justin Moy, director of EHF HypothekenSpeaking through the newspaper agency, said that the rates offered were more than average High Street alternatives, but there were many other benefits, including the improved affordability. “That piece,” he said, “might be the impossible purchase.”
Ranald Mitchell, director at Charwin -HypothekenAlso said with newspapers, said: “The launch of April mortgages is exactly the kind of innovation that the British market needs.”
He added: “The real power of this product is in its balance between opportunities and safety: borrowers are given improved loan power, while the flexibility retains to go home and pay without fines, a critical function that often lacks deals in the longer term.”
But he warned: “Borrowers have to go into long -term solutions with their eyes wide open. Although determining a maximum of 15 years of invaluable payment protection, this can mean that interest rates will fall in the future.
“That said, in today’s unpredictable market, many will appreciate certainty about speculation. April mortgages must be welcomed for bringing new thinking and consumer-oriented product design into the sector in the sector.”