We are pleased to announce that we are introducing some exciting enhancements to our Residential and Buy to Let affordability policies. This means that we will be able to help more of your clients with their mortgage needs.

The changes affect pension contributions, annual bonus and child benefits; please take the time to review the update below.

For further information on any of the changes, please refer to the Affordability FAQ document or refer to the broader lending criteria on our website. This will give you all the information you require to complete your application in MAX under the new rules.

How are we going to treat Pension Contributions?

  • You no longer need to advise us of any pension contributions that your clients are making. We will automatically account for a base level of pension contributions in our calculation, so you don’t need to include pensions when inputting the application into MAX.

Points to note

  • IMPORTANT – You will no longer need to add any form of pension contributions into the other regular commitments section in MAX -it (MAX) will be updated shortly to reflect the new policy, alerting you not to add pension

 

 

What’s changing with annual bonus payments?

  • We are removing the £75K minimum income threshold for using annual bonus in affordability.
  • Applicant(s) must have a combined total annual bonus income of greater than £10k
  • For our Premier and Wealth customers the annual bonus used in affordability will no longer capped in line with basic salary where their basic income is >=£75,000
  • Annual bonus will not be included where the customer is debt consolidating or where they are remortgaging with outstanding unsecured credit and taking additional borrowing.

 

Child benefits treatment

  • Please note that we will no longer take in to account child benefits income in cases where either applicant(s) earn £50,000 or more, and/or where the children are thirteen or older.  This is to align to tax rules and ensure that any income considered in affordability is sustainable.

 

Further information

  • Further information on our interest only policy is available for Intermediaries on the Lending Criteria section of the website
  • The affordability calculators on our Intermediary website have been updated to reflect the latest criteria and can be accessed by all colleagues.
  • Please refer to your  or Intermediary Relationship Manager in the first instance for any further information.