Ipswich Building Society has launched a range of deals aimed at mortgage prisoners, arguing that it can use existing regulation to offer a lower affordability assessment.

The mutual’s ‘like for like’ range calculates affordability at product pay rate only, and not at a stressed rate. Borrowers must have been with their lender for two years or more, be up to date with their repayments, and cannot be looking to borrow extra funds.

Richard Norrington, chief executive officer at Ipswich, noted that the FCA’s proposed changes to affordability criteria do not come into effect until the end of the year, but there is a “tranche of homeowners” unable to remortgage away due to “affordability assessment processes” but who cannot wait for the new legislation.

“That’s why we’ve developed and introduced our new like-for-like remortgage range, to provide greater opportunity for these borrowers,” he said.

There are six deals in the like-for-like range, including a two-year fixed rate at 2.80 per cent up to 80 per cent loan-to-value (LTV) with an application fee of £199, completion fee of £800 and CHAPS fee of £35.

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The range includes two deals specifically for borrowers aged over 50, and two shared ownership products available at up to 90 per cent of the share.

Loans are available for terms of between five and 40 years, up to a maximum loan of £750,000, dropping to £500,000 for shared ownership.

The mutual said that it will continue to individually underwrite these like-for-like cases.
Norrington said this approach meant the lender can understand the “personal circumstances behind each application.

“This, coupled with our entrance into the like-for-like mortgage market, will enable us to provide greater opportunity for borrowers who find themselves with restricted access to other mortgage products due to guideline changes and the introduction of stress testing,” he concluded.