Clients, on a sole or joint income, will have to prove they have been renting through a recognised letting agent for the last twelve months. The offer will equate to 90 per cent of the applicant’s current rental payments.
A 10 per cent deposit is required, although this can be gifted from family or new-build developers.
Dale Jannels, sales and marketing director of the AToM group, said: “What better way to help people get onto the property ladder? If they can manage their rental payment each month successfully, then why not transfer this to a mortgage?”
Tony Jones, managing director of mortgage distributor Pink, said basing mortgage offers on rent was a good idea as it demonstrated affordability. However he cautioned: “Clients must be advised to budget properly, because while rents don’t tend to increase dramatically you cannot predict where interest rates will be in three years time.”
Andrew Frankish, operations director for Mortgage Talk, said: “Higher income multiples need to be administered cautiously, though there is a strong argument if someone is already successfully paying a high rent they deserve a mortgage.”
