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Ipswich Building Society has launched a new range of mortgage products aimed at helping ‘mortgage prisoners’ – those borrowers who are unable to access the wider mortgage market. Mortgage prisoners came about following the introduction of industry-wide affordability stress tests in 2014. These stricter regulations have meant that some people are stuck on higher interest mortgage rates and are unable to remortgage to a better deal – even if they have a spotless repayment history.
The Society now offers six remortgage deals with a lower affordability assessment. Lenders must show that a mortgage is affordable, and this includes the cost of the mortgage as well as other expenses and your income. The mortgage cost uses both the initial mortgage rate and a higher rate. This higher rate is one from a scenario where interest rates rise dramatically. It is designed to ensure a mortgage is affordable both now when interest rates are low and in the future if they should rise.
Mortgage prisoners looking to take advantage of the Ipswich deal must have been with their lender for two years or more, be up to date with their repayments and are not borrowing additional funds.
Richard Norrington, CEO at Ipswich Building Society, commented “We recognise that there is 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.”
The important detail of these new deals are:
Loans are available from five to 40-year terms. All remortgage applicants benefit from a free valuation up to a maximum property value of £1m and assistance with legal fees.
To see how these compare with the rest of the market simply check out our mortgage comparison charts.
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