Accord Mortgages has announced it will now be able to lend on average 15% or £37,000 more as a result of changes it is making to how it assesses borrowers’ affordability.
The intermediary-only lender is responding to updated regulatory guidance which enables lenders to set lower ‘stress rates’ – sample rates used to underwrite mortgage applications, to check that borrowers will still be able to afford their payments if interest rates increase in the future.
The new affordability assessment model will apply to all new lending.
Jeremy Duncombe, managing director of Accord Mortgages, said: “Accord already offers market-leading innovation and flexibility to help borrowers overcome today’s affordability challenges, but we’re always looking for new ways of applying the common-sense approach we’re known for.
“We really welcome the regulator’s latest guidance on aspects like the stress interest rates we have to apply to our mortgage decisions.
“We’ve been able to review our already-competitive affordability model in light of this, combined with changes in market and economic conditions, which means we can help even more people achieve their homeownership goals.”
Other recent steps Accord has taken to help borrowers overcome affordability challenges, have included the launch of its first-time buyer cashback product range offering up to £6,250 cashback for them to use toward the increased costs associated with buying, including a higher stamp duty purchase tax. It has also extended the eligibility criteria for its unique £5k Deposit Mortgage to people buying flats. And its Boost LTI range gives borrowers access to more times their income, subject to criteria.
