Saffron For Intermediaries, the dedicated broker channel of Saffron Building Society, joins the ranks of lenders providing options for the so-called “mortgage prisoners”.
Saffron is offering customers the chance to remortgage under the terms of the FCA transitional rules, before the new European Mortgage Credit Directive (MCD) brings an end to this opportunity in March 2016.
The society’s Transitional Mortgage, which has been developed for borrowers with a good credit history but who are unable to meet their existing lenders’ affordability criteria, has the following features:
- 3.99 per cent five-year discount rate. After the discount period the rate reverts to Saffron’s standard variable rate (SVR), which is currently 5.39 per cent.
- 75 per cent maximum loan-to-value (LTV)
- £995 arrangement fee which can be added to the loan
- No early repayment charges (ERCs)
- Purpose: Remortgaging
- Loan size: In the range £ 30,000 to £500,000
- Fully portable
- After 3 years, borrowers with a clean payment history can switch to one of Saffron’s current retention deals if they want to
- Existing mortgage must have been held for 3 years with no additional borrowing or second charges during this period
Anita Arch, head of mortgage sales, said:
“The plight of mortgage prisoners locked into existing deals because of the MMR affordability rules has been well documented.
“Saffron is therefore delighted to be able to offer a helping hand before the new European Mortgage Credit Directive comes into force next year. Borrowers can remortgage onto an attractive 3.99% 5-year discount which has no early repayment charges and an arrangement fee of just £995 which can be added to the loan.
“We believe this deal will be welcomed by borrowers who thought they had no way out of their existing mortgage and we’re expecting significant interest from brokers.”
