From today (11 October) we are improving the price on three of our standard residential fixed rates.
Many of our customers will go through a change in personal circumstance at some stage in their lives.
Whether in the shape of a divorce, a separation, becoming self-employed, or being gifted cash for a deposit from a parent or guardian, lenders need to be flexible to meet the changing demands of today’s mortgage market.
This is where split mortgages come into play (by term, by product and by repayment type).
A split mortgage can allow customers to tailor their mortgage to suit. For example, split part of the mortgage to a variable interest rate, and part to a fixed rate.
There's also Joint Borrower - Sole Proprietor, which gives those looking to buy a property additional borrowing power which otherwise may have been beyond their reach. This can be particularly useful for parents, grandparents or a guardian who already own their home and have a good income, but are looking for alternative ways to help enhance their loved ones borrowing power.
Let’s break it down into two supporting case studies:
David is 59 years old and planning to retire at 75. He is supporting his son’s purchase by being a joint borrower on the mortgage because his son’s income doesn’t quite support the loan required. Nonetheless, ownership of the property will be in his son’s sole name.
What happened next: A lender can split the loan so the part of the mortgage the son qualifies for is over a 35 year term. The excess amount that David is helping with is on a 16 year term which will finish when David retires.
Michelle is in her late 50’s and buying a new home.
What happened next: A lender can arrange to split her loan - part on a capital repayment basis to finish when she retires and the remainder on an interest-only basis - which will be paid by her pension income until the age of 80. Michelle plans to downsize before she reaches the end of the term.
Sound familiar? This is how does it work with us:
At Newbury Building Society, we can:
- Split a mortgage by term, product and repayment method
- Split a mortgage to offer multiple parts to the loan
- Combine a mortgage with Joint Borrower – Sole Proprietor.
Don’t forget: We do not credit score, all our mortgages are individually underwritten and we consider unusual properties and circumstances, including self-employed and contractors.