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27/10/2020
Accord Buy to Let updates range and ICR thresholds

Accord Buy To Let is refreshing its entire range to provide a more streamlined product offering for brokers and their landlord clients.

As of 8am on Thursday 29 October, the number of products will reduce from 57 to 27 covering LTVs from 65% to 80% across two and five-year fixed rates for both purchase and remortgages. End dates are also being extended until 31 March 2021.

Highlights of the new product range for remortgage customers include:

  • Five-year fixed rate at 2.06% at 65% LTV with £995 fee, free valuation and remortgage legal service
  • Five-year fixed rate at 2.06% (was 2.08%) at 75% LTV with £1,495 fee and free valuation
  • Two-year fixed rate at 3.98% (was 3.04%) at 80% LTV with £1,995 fee, free valuation and remortgage legal service

And for purchase customers:

  • Five-year fixed rate at 2.00% at 65% LTV with £1,495 fee, £250 cash back and free valuation
  • Five-year fixed rate at 2.03% at 75% LTV with £1,995 fee, £250 cash back and free valuation
  • Two-year fixed rate at 3.98% (was 3.04%) at 80% LTV with £1,995 fee, £250 cash back and free valuation

In addition, the intermediary lender is also simplifying its interest coverage ratio (ICR) and interest coverage ratio rate (ICRR) thresholds. This includes removing the separate ICRs for leasehold and freehold properties. The new thresholds will come into effect from 8am on Friday 30 October. Pipeline cases will not be impacted by the changes.

Nicola Alvarez, Corporate Account Manager – Propositions, said:

As part of our ongoing review of the range, we are reducing the number of products and updating rates and incentive packages to ensure we remain aligned to current market conditions. Whether clients are new or established landlords, are purchasing or remortgaging, there are now a focused range of options to meet their needs.

We’ve also used the refresh as an opportunity to simplify our rental calculations, which we hope will make the application process as easy as possible for brokers and their client, whilst still ensuring landlords are able to cover all the costs associated with managing a rental property.

The new ICR and ICRR thresholds are as follows:

 

Initial Product Length

< 5 Years

>= 5 Years

Applicant Tax Rate

Mortgage Type

ICR

ICR rate

ICR

ICR Rate

Basic Rate*

Straight switch

125%

5.5% or Product Rate + 2% - whichever is higher.

125%

4.5% or Product Rate + 1% - whichever is higher.

Capital Raising

125%

125%

Higher Rate**

Straight switch

135%

145%

Capital Raising

145%

145%

*Basic Rate Tax Payer – Where all applicants’ party to the application have an income of no more than £45K AND who are basic rate tax payers or pay 0% tax.

**Higher Rate Tax Payer – Applications where at least 1 applicant has a taxable income greater than 45K and/or those which are higher rate tax payers or additional rate tax payers.


 

To check affordability, please access our rental calculator. Please note this will not be aligned to the new changes until 8am on Friday 30 October 2020.

There is no change to background properties which must collectively meet a minimum rental calculation of 135% interest coverage ratio (ICR) at a stressed rate of 5%.

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