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Private Finance's Mortgage Memo - 28th April 2022

This is our take on what is currently happening in the mortgage market. Our views are often cited in several national publications, including; BBC News, The Times, Telegraph, City AM, FT Adviser and Daily Mail, as well as a number of key trade publications, so this should keep you ahead of the curve. If you have any questions on any of these stories, or would like further information, please do not hesitate to get in touch.

  • Large rate increase by Santander of up to 0.55%
  • Specialist lender Molo suspends their BTL products
  • Lenders more flexible with their income multiples

Large rate increase by Santander of up to 0.55%

Santander have increased their rates this week by up to 0.55%, with plenty of the increases being more than 0.4% across their fixed rate range at most LTV levels. Likewise, HSBC have also warned they will be increasing their rates at midnight tonight, these rapid changes with less than a days notice keeps brokers busy and clients often frustrated if a deal is missed out on.

  • We can only assume this trend will continue and more high street lenders will continue to rise their rates ahead of the next MPC meeting on the 5th of May, the base rate expected to rise again as inflation reached a 30 year high in March.

Specialist lender Molo suspends their BTL products

Molo, a specialist lender, has temporarily withdrawn its buy-to-let products from the market as they run dry of available funding and have not yet finalised their next funding line. For more information: https://molofinance.com/mortgage/buy-to-let

  • We understand that this isn't ideal for any lender, but applications in process have been cancelled and while fees are being refunded, this will waste clients time and does not reflect the "excellent level of customer service" they distinguish themselves as.
  • As the current state of the market and costs of funding worsen, could this lead to more specialist lenders following the same path? While this is unclear at present, it certainly does add to the levels of uncertainty in the lending space.

Lenders more flexible with their income multiples

Over the last year, we have seen several lenders become more flexible with their income multiples, increasing their maximum borrowing levels customers can achieve for example Halifax and HSBC increasing their maximum multiples to 5.5x, Kensington allowing 6x on certain products, etc. This week TSB raised their maximum multiple to 5x also, from the previous 4.75x.

  • Many lenders already offer 5 times income multiples, however as more lenders continue to be more open, it allows for more flexibility and options in the market. TSB stress slightly less for remortgages and first-time buyers, and so this change may help people stretch their affordability a little more.
  • It all has to do with affordability though and lenders have been tightening their affordability assessments because of the base rate rise last month and rising cost-of-living. Santander are one of many lenders who have adjusted their affordability calculator this week.
  • The 5 times income would be good for those that qualify and have strong affordability in the background. With annual property prices increasing 14.3%, the largest growth seen since 2004, this change may help some borrowers achieve the properties they wish to purchase.

Private Finance's Mortgage Memo - 28th April 2022

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© Private Finance Limited, 2022. Private Finance provides independent mortgage advice and arranges individual mortgage solutions for clients. Private Finance is a trading style of Private Finance Ltd, 29 Lincolns Inn Fields, London, WC2A 3EG, registered in England no. 3855776 and its Appointed Representatives. Private Finance Limited is authorised and regulated by the Financial Conduct Authority (FCA registration number 310566).

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