Changes designed to make mortgages more accessible to underserved borrowers

Afin Bank, which was created to support foreign national borrowers living and working in the UK, has increased its maximum Loan To Value (LTV) to 95% for its Prime and Professional mortgages, while also cutting existing interest rates by up to 100bps across both ranges.

While the changes will benefit all borrowers, the lender says the improvements will make its mortgages even more accessible to foreign nationals in the UK with valid work visas and passports. These are customers who often struggle to get mortgages because mainstream lenders typically demand at least 12 to 18 months of residency in the country, while Afin will consider an applicant after only six months residency.

Another barrier for foreign nationals has been their lack of UK credit history. Afin addresses this with individual underwriting, which includes enhanced financial checks.

Rates for the new higher LTV Prime and Professional products are:

Prime (New higher LTV product, 80% to 95% LTV)

• Two-year fixed rate 6.39%, maximum 95% LTV
• Five-year fixed rate 6.49%, maximum 95% LTV

Professional (New higher LTV product, 90% to 95% LTV)

• Two-year fixed rate 6.24%, maximum 95% LTV
• Five-year fixed rate 6.34%, maximum 95% LTV

Interest rates for existing products in Afin’s Prime and Professional range have been reduced by up to 100bps across its two-year fixed, five-year fixed and two-year tracker mortgages. The new rates are:

Prime (Existing range, up to 80% LTV)

• Two-year fixed rates ranging from 5.24% to 5.34%
• Five-year fixed rates ranging from 5.34% to 5.49%
• Two-year tracker rates ranging from 5.99% to 6.39%, with no ERCs

Professional Range (Existing range, up to 90% LTV)

• Two-year fixed rates ranging from 5.34% to 5.99%
• Five-year fixed rates ranging from 5.49% to 6.09%
• Two-year tracker rates ranging from 6.09% to 6.74%, with no ERCs

In addition to introducing a maximum 95% LTV, the minimum salary requirement for a Prime mortgage will be just £35,000 for sole borrowers and £60,000 for joint applicants, and customers will be able to borrow up to 4.5 times their income. Foreign nationals can apply for an Afin mortgage with only six months UK residency.

The lender’s Professional range already offers enhanced loan-to-income (LTI) ratios of 6.5 for anyone with a recognised professional qualification, but they can now borrow with just a 5% deposit with the enhanced maximum 95% LTV. Professionals from overseas on a valid working visa will be able apply for a mortgage after only six months residency in the UK.

Jason Oakley, Chief Executive Officer of Afin Bank, said: “The reaction to Afin Bank has been incredible since we launched in the summer and we have been inundated with interest. But we have been listening to brokers and customers, and what many of them want is a more manageable deposit so people can start buying their own home sooner.

“That’s why we are introducing a 95% LTV to bring homeownership within reach of even more people who have been saving hard towards a mortgage. We already accept gifted deposits from family members based in the UK or overseas, which is a popular source of deposit contribution with diaspora borrowers, so this move will help them even more.

“These changes have been made to bring home ownership within reach of borrowers who don’t always get the support they need because their situations are a bit different. We are supporting the self-employed, qualified professionals and foreign nationals working in the UK, who are vital to the growth of our economy.”

All of Afin’s mortgages are individually underwritten and based on the borrowers’ true financial situation, not an automated model. This helps overcome challenges many underserved borrowers face, such as complex income streams, more limited credit histories and, in the case of foreign national customers, UK residency of less than the minimum 12 months typically required by mainstream lenders.

The enhancements to Afin’s Prime and Professional range are available as two-year and five-year fixed deals or as a two-year tracker mortgage, for first time buyers, movers and remortgage customers for residential mortgages on properties in England and Wales.

All two-year and five-year fixed rate mortgages have a £1,495 fee, which can be added to the loan, subject to maximum LTV. All fixed rate products allow overpayments of up to 10% of the mortgage balance per year without penalty, while the tracker mortgage has no ERCs (Early Redemption Charge).

In additions to its Prime and Professional products, Afin also supports ‘asset rich’ high net worth customers via its Premier range, as well as buy-to-let borrowers.