The lender has introduced a series of two-year discount products, with no extended tie-ins, subject to one month’s written notice. Rates start at 5.44 per cent, subject to LIBOR at 4.99 per cent.
The range includes no income multiples, with affordability based on a debt-to-income ratio. There is a range of two and three-year fixes starting from 5.14 per cent, fixed until 1 January 2009 and 1 January 2010 respectively.
Preferred also introduced enhancements to its buy-to-let products, including increasing the buy-to-let maximum portfolio to £1.5m and 12 properties, a 100 per cent rental cover based on initial pay rate on all its two and three-year fixes, and a reduction in its right-to-buy loadings.
Commenting on the changes, Roger Taylor, director of sales and marketing at Preferred Mortgages, said: “The changes we’ve made reflect the current state of the market as well as the expressed needs of our intermediaries. Despite an unpredictable climate, we’ve taken some calculated risks to ensure our product range remains among the most competitive in the market. We’re always looking for new ways to enhance our product range and feel that these new products – coupled with the decision to hold our existing fixed rates – will prove popular with customers and brokers.”
Ian Crampton, sales director at Ferndown, said: “A lot of mortgage lenders are moving towards affordability based calculations. While this may be considered a good move, it is only as good as the system the lender is using. Using a debt-to-income ratio is good, but it will depend on the other parameters being applied in the affordability model.”
