Lender is also introducing the new option of a 40-year term
Specialist lender Pepper Money has announced a number of enhancements to its lending criteria to support customers who are applying for a mortgage in maximising their affordability.
The lender has increased the amount of variable income it will consider as part of an affordability calculation and can now include 100% of monthly bonus or commission and 100% of overtime payments. Previously, it had considered 50% towards affordability on both.
Also, Pepper Money can now consider 50% annual or quarterly bonus or commission and 50% rental income towards a customer’s affordability calculation.
In addition to these improvements, the specialist lender is introducing the new option of a 40-year term to help customers spread their payments over a longer period.
“At Pepper Money, we’re always looking to respond to market trends and help customers to overcome the challenges that stand in the way of them achieving their goals,” said Paul Adams (pictured), sales director at Pepper Money. “Property prices may be softening, but the ongoing cost-of-living crisis and higher interest rates mean that mortgage affordability continues to be a challenge.
“Our Specialist Lending Study identifies customers’ monthly budgets are getting tighter due to increased food and energy costs. While extending your customers’ term may not be appropriate for all customers, it’s important we provide a wide range of mortgage options to meet the changing needs of your customers.
“By increasing our consideration of variable income, we’re fairly rewarding customers for their additional work or performance related pay. The introduction of 40-year terms not only helps to maximise affordability, but also reflects shifting working trends, as people work until later in their life.”
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