Abbey for Intermediaries launches NewBuy range
Abbey for Intermediaries has launched a range of products for the Government’s flagship housing initiative NewBuy.
AFI is offering a three-year fixed rate and a five-year fixed rate at 5.49 per cent and a seven-year fixed rate at 5.99 per cent. All three products are available for a £99 fee.
The three products are limited to brokers who are on the panels of the four housebuilders AFI is distributing its deals through - Barratt Homes, Berkeley, Bovis Homes and Persimmon. The deals are not available direct.
All products come with AFI’s homebuyer solution, which includes a free standard mortgage valuation and £250 cashback on completion.
The lender announced its intention to launch a range of NewBuy products when the scheme was launched in March.
NewBuy, which is for borrowers wanting to buy newbuild properties, was designed to ease lending at 95 per cent loan-to-value ratios and lower the price of these products compared with standard products.
The Government underwrites up to 5.5 per cent of the loan while builders give 3.5 per cent of the loan to the lender to hold for seven years, after which it is returned, minus any losses. The idea is if the home has to be repossessed, the lender is likely to recover most of its money.
NatWest, Nationwide Building Society and Barclays were the only lenders taking part when the scheme launched in March, although Halifax joined this month.
But less than two months after the scheme’s launch, the three initial lenders all raised their rates.
Brokers told Money Marketing the scheme was in danger of failing as a result of the rate increases, meaning the NewBuy products were not that different from some of the standard 95 per cent LTV deals on the market.
The table below shows how the NewBuy products compare to some of the best-buy 95 per cent LTV products on the market.