Significant updates to its criteria promise greater flexibility for borrowers
Darlington Building Society has launched a new 95% loan-to-value (LTV) Visa mortgage and revised its mortgage criteria to better accommodate the evolving housing market. The society’s recent changes are designed to address challenges faced by potential homebuyers, particularly first-time buyers and skilled workers with visas.
New 95% LTV Visa mortgage
Effective October 3rd, the Darlington Building Society’s 95% LTV Visa mortgage offers competitive fixed rates of 5.49% for a five-year term and 5.89% for a two-year term. This new product aims to assist more skilled workers in the UK, particularly those on Tier 2 visas.
The eligibility criteria have been tailored to improve accessibility, featuring no minimum income requirement for 90% LTV applications and a minimum income of £60,000 for 95% LTV applicants. For joint applications, the minimum income requirement is set at £90,000.
A key feature of this mortgage product is the “credit search not credit score” approach. This initiative aims to help newcomers to the UK who may have limited credit history and allows skilled workers to apply with as little as two years remaining on their visa. Additionally, income from a spouse with Indefinite Leave to Remain or relevant visas is now accepted.
“Visa mortgages are the jewel in the crown of our specialist mortgages. Offering up to 95% LTV with fantastic supporting criteria, these mortgages are now more accessible than ever,” said Louise Thorpe (pictured), chief customer officer at Darlington Building Society.
Support for first-time buyers
Darlington Building Society has also focused on helping first-time buyers, who often face significant barriers to homeownership. Research indicated that 55% of prospective homeowners cite saving for a deposit as a major hurdle. Darlington Building Society’s new 95% LTV first-time buyer mortgage requires a smaller deposit, easing this challenge.
To further support affordability, borrowers now have the option to spread repayments over a 40-year term. The society has reduced rates by up to 0.20% on fixed-rate mortgages with 90% to 95% LTV for terms of two to five years. Enhanced criteria will consider various borrower circumstances, including self-employment, variable incomes, and minor credit issues.
Thorpe emphasised the importance of flexibility in the application process: “Not all first-time buyers work a 9-5 job, so we’ve flexed our criteria to open the market for more aspiring homeowners in a range of circumstances.”
Changes to buy-to-let mortgages
In a significant shift, Darlington Building Society has removed the maximum age limit on all Buy-to-Let interest-only applications, including those for holiday lets. The news release noted this change aligns with the current financial landscape and recognises the trend of people living longer and seeking supplementary income from property investments.
Thorpe remarked, “It feels counterintuitive to cap the age at which somebody can benefit from additional income—particularly against the current financial landscape.”
Rate reductions for existing borrowers
In addition to these enhancements, Darlington Building Society has cut rates for existing borrowers and product transfers by up to 0.30%. These changes have positioned the lender’s 80% LTV deals among the top 10% in the market, noted the news release. Product transfers for current borrowers are fee-free, and a £500 cashback is available on exclusive remortgage products.
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