Two weeks ago we informed you of some exciting enhancements to our Residential and Buy to Let affordability polices. Please see below for full details.

Your feedback has suggested these changes have been well received and now we are pleased to announce a further enhancement, based on your feedback, which will allow us to help even more of your clients.

Further enhancement

  • Annual bonus will now be included where the customer is remortgaging with outstanding unsecured credit and is taking additional borrowing (provided there is no element of debt consolidation)

Reminder of recent affordability changes

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.

 

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 theLending 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.