"We know people are hesitant to move right now, with people holding out for changes with the Bank of England Base Rate and how it impacts the housing market."
- Chris Blewitt, head of mortgages for Darlington BS
Darlington Building Society has introduced a new reversionary rate to its mortgage range to help borrowers coming to the end of their incentive period and address affordability issues faced by first-time buyers.
The Society’s mortgage products for new business and product switches will now roll onto a lower reversionary rate (6.59%) for up to three years following the initial incentive period, instead of going straight onto its standard variable rate (SVR) (8.09%).
The introduction of a reversionary rate will reduce the cost to borrowers over the mortgage deal, potentially improving affordability and mortgage accessibility for prospective borrowers.
Chris Blewitt, head of mortgages for Darlington Building Society, said: “As interest rates fluctuate, affordability models require review to ensure that they adequately reflect the market. Aspiring homeowners have felt the pinch in recent months, and it’s up to lenders to put measures into place to support all borrowers. Our refreshed affordability criteria adds a layer of proportionality to the marketplace so that home movers can afford to take the next step, first-time buyers can sensibly afford to get onto the property ladder, and the wider housing market maintains crucial flexibility.
“The reversionary rate not only helps people to get on the ladder as it opens up their prospects and affordability, but it also means that when new and existing borrowers come to the end of their initial incentive period, they benefit from lower monthly repayments than if they had rolled straight onto an SVR. We know people are hesitant to move right now, with people holding out for changes with the Bank of England Base Rate and how it impacts the housing market. It’s our hope that this new stepped approach will help to reassure buyers across the board.”
