Prospective buyers and homeowners who meet certain criteria could be tempted by a new mortgage offering higher borrowing amounts and LTV limits.
Newly qualified professionals are being targeted by Clydesdale Bank Intermediaries, with the offer of borrowing significantly more than they can with the majority of mortgage lenders, if they are earning a minimum of £40,000.
Professionals that have qualified within the past five years (accountants, architects, barristers, chartered surveyors, dentists, medical doctors, pharmacists, pilots, solicitors or vets) are being offered up to 5.5 times their salary by Clydesdale Bank – significantly more than the average guideline of 3 to 4.5 times annual income.
Young professional first-time buyers could benefit
As well as being able to borrow substantially more, the new mortgage deals are available to borrowers that need between 85% and 95% of the property price, ideal for first-time buyers. Two-year fixed rate mortgage rates start from 2.14% at 85% loan-to-value (LTV), 2.49% at 90% LTV and 3.59% at 95% LTV, but terms are available for two, three and five years, with a maximum loan of £600,000. For those remortgaging, the deals are available up to 90% LTV.
With no fees and a free valuation, this is a compelling offer from Clydesdale in the competition between lenders for new borrowers. For joint applications where only one borrower is a newly qualified professional, the other applicant’s income is subject to standard multiples, but the substantial multiple on the eligible applicant’s salary can still make a big difference to the amount borrowed.
Other deals are available
While other lenders may better Clydesdale’s loan rates, the maximum loan amount and the loan-to-value limits are an attractive proposition that, for some, will offset the slightly higher mortgage rates. Maximum borrowing levels are one of the biggest issues for first-time buyers, particularly in London and the south-east.
Clydesdale is not the only lender to offer incentives to young professionals. Scottish Widows has led the way in the professional market, and Metro Bank has specific deals for professionals available. While other lenders may not yet be offering explicit deals for young professionals, there is a definite trend towards a more flexible approach and a positive reaction from both borrowers and brokers.