Newcastle for Intermediaries is offering one of the most generous income multiples to borrowers looking for larger loans.
The building society has a section of two-year fixed and discounted rates, plus a five-year fix.
The lowest rate is fixed at 1.79% until 28 February 2022 and it has a £1,999 arrangement fee. After the fixed-rate period, the mortgage reverts onto the lenders 4.49% standard variable rate and the APRC is 5.10%. Applicants will need a 20% deposit to qualify and there is a free property valuation.
Aaron Strutt, product director at Trinity Financial, says: “Newcastle’s rates are much more competitively priced than many of the other lenders offering income stretch mortgages and the setup fees are cheaper. A few of the building societies charge per cent based arrangement fees.
"If you are looking for a five-year fix Newcastle offers a 2.55% rate and it also has a £1,999 arrangement fee. The APRC is 4.70%.
Are you paid a bonus, or do you get overtime or commission?
Newcastle can accept up to 100% of frequent overtime, bonuses and commission when it is paid monthly and evidenced on last three months consecutive payslips. The income will need to show on the year to date earnings on payslips and these payments have been consistent.
The society can take 100% of less frequent bonus payments where there is a two-year track record and it shows on the last two P60s; to qualify the gross income, including bonus, must be in excess of £100,000.
Are you looking for interest-only 5.75 times salary mortgage?
Newcastle offers interest-only loans where the maximum loan-to-value is 75% and this is capped at 80% overall.
The society will accept the sale of the property where interest-only exposure is capped at 50% loan-to-value and there must be a minimum of £150,000 equity in the property on completion. Any additional loan-to-value up to 80% would need to be on capital repayment.
Barclays was one for first lenders to start offering up to 5.5 times single and joint salary mortgages.
The bank has some of the most competitively priced mortgages in the market and a great choice of fixed or tracker rates.
Barclays recently changes its policy, so applicants do not need to open a Premier account to be accepted for a mortgage, making the application process much quicker.
Applicants will need an annual income of £75,000 to qualify. If one applicant does not earn £75,000 - you will need a joint income of £100,000 to qualify or have £100,000 saved or invested with the bank. Interest-only applications will not be considered, although Barclays will potentially offer a 40-year repayment term to a maximum age of 70. This should lower the monthly costs.
You will need a 15% deposit to qualify for a 5.5 times salary mortgage through Barclays.
Santander for Intermediaries changed its acceptance criteria in April 2018 and started providing larger loans to borrowers earning over £100,000.
If you earn between £45,000 and £99,000 - Santander's maximum income multiple is 5 times salary - rising to 5.5 times salary for those earning over £100,000 when they have a 25% deposit. The maximum income multiple reduces to 5-times salary if you have less than a 25% deposit.
Santander has a range of extremely competitive fixed and tracker rates available for loans between £6,000 and £3-million.
The bank is currently taking an average of 14 days to produce a mortgage offer and it provides a free property valuation.
Santander is of the few lenders providing like-for-like remortgages using an income multiple of up to 5.5 times salary. There is no set minimum income or loan size enabling borrowers stuck on expensive rates to switch to the bank providing they do not borrow any more money.
If you are looking to borrow 6 times your salary for a mortgage Trinity Financial has access to a few lenders offering terms. One smaller building society will even offer over 6 times income providing a large part of the mortgage is on interest-only and clients take a longer-term product.
Kensington for Intermediaries has a range of mortgages targeting younger professionals aiming to get on the property ladder and those earning over £100,000.
The specialist intermediary-only lender has a range of "Brighter mortgages, for brighter futures" range providing six-times salary mortgages to borrowers with limited debts or credit commitments. Applicants cannot be older than 40, have a deposit of at least 10% and be working as an Actuary, Barrister, Chartered Accountant, Commercial Pilot, Dentist, Doctor or Solicitor. The arrangement fees range between £0 and £1,299.
The "Select Premier" mortgages are available up to 6 times income and they have a minimum loan size of £500,000 and a maximum loan size of £2 million. Applicants will need a 10% deposit to qualify although they will need a 20% deposit for a £2 million mortgage. The arrangement fees range between £1,499 and 0.25% of the loan amount.
Many of the high street mortgage lenders cap their income multiples at 4.75 or 5 times salary making it harder for borrowers to buy the property they want.
Trinity Financial has access to a range of banks and building societies providing generous affordability calculations and our brokers can work out how much you can borrow for a mortgage.
To generate an accurate loan size our brokers will ask you how much you earn, whether you have any credit cards or loans, and if you have any children or childcare costs.
Call Trinity Financial on 020 7016 0790 to find out how much you can borrow
If you are locking into an income stretch mortgage it is worth considering how you will remortgage when the fixed or tracker rate finishes. The mortgage market moves quickly and maximum income multiples regularly change.
Many borrowers expect their salary to increase over the coming years so they will be able to afford to switch mortgage lenders, while others will be happy to stick with their lender and arrange a product transfer.
Even though our brokers will contact you to arrange a remortgage when your deal expires, it is worth making sure your lender offers product transfer rates and you understand what happens when the rate finishes. This will help you avoid reverting onto an expensive standard variable rate.
Trinity Financial will do everything possible to secure you the mortgage loan size you require at the most competitively priced rate.
If you are looking for an income stretch mortgage there is a lot of choice in the market and taking the wrong deal with high arrangement fees can be a costly mistake. Particularly if you have to take a five-year fix when a two-year deal is available.
Click on the link to view some of the mortgages we have arranged over the last ten years and https://www.trinityfinancialgroup.co.uk/case-studies/