Resi 12
A solution for clients with a small credit blip more than 12 months ago.
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More options for your Resi 12 clients
Introducing Step Down fixed rates: The 5 year Step Down fixed rate option provides a fixed rate for the first 2 years, followed by a lower fixed rate for the remaining 3 years, giving your client an overall saving compared to the equivalent Resi 12 5 year fixed rate.
Please note that sourcing for Step Down fixed rate will vary depending on your sourcing system of choice. For Mortgage Brain, Trigold and 27tec, please see our FAQ: How do I source the Step Down fixed rate?
Savings your clients could make with Step Down fixed rates
75% LTV Example
RESI 12 STEP DOWN 5 YEAR FIXED RATE
| Monthly payment for the first two years: | £930 |
| Monthly payment for the following 3 years: | £807 |
| Step Down in monthly payment: | £123 |
| Total cost over initial term: | £51,369 |
RESI 12 STANDARD 5 YEAR FIXED RATE
| Monthly payment for the full five years: | £897 |
| Total cost over initial term: | £53,806 |
| Saving over five years with Step Down fixed rate: | £2,436 |
Example of cost illustrations at 05/07/2024, based on a rate including a £999 fee.
80% LTV Example
RESI 12 STEP DOWN 5 YEAR FIXED RATE
| Monthly payment for the first two years: | £2,487 |
| Monthly payment for the following 3 years: | £2,134 |
| Step Down in monthly payment: | £335 |
| Total cost over initial term: | £136,496 |
RESI 12 STANDARD 5 YEAR FIXED RATE
| Monthly payment for the full five years: | £2,391 |
| Total cost over initial term: | £143,439 |
| Saving over five years with Step Down fixed rate: | £6,943 |
Example of cost illustrations at 05/07/2024, based on a rate including a £999 fee.
85% LTV Example
RESI 12 STEP DOWN 5 YEAR FIXED RATE
| Monthly payment for the first two years: | £732 |
| Monthly payment for the following 3 years: | £640 |
| Step Down in monthly payment: | £92 |
| Total cost over initial term: | £40,630 |
RESI 12 STANDARD 5 YEAR FIXED RATE
| Monthly payment for the full five years: | £710 |
| Total cost over initial term: | £42,599 |
| Saving over five years with Step Down fixed rate: | £1,968 |
Example of cost illustrations at 05/07/2024, based on a rate including a £999 fee.
Suitable for...
Applicants with a small credit blip more than 12 months ago
First time buyers and Homemovers
Available for purchase and remortgage applications
Lending criteria
DMP active in last 12 months considered
Default, unsecured payment arrears and CCJs considered
No minimum income requirement
Minimum loan amount £25k
Further lending criteria
Arrears
- Secured loan arrears acceptable if older than 12 months, and no more than 1 in the last 24 months
- Unsecured credit arrears acceptable if accounts are now up to date (max status of 2 in last 12 months)
CCJs
- Acceptable if older than 12 months
- Maximum of 1 registered in the last 24 months
- Total amount must be no greater than £1,000
Defaults
- Acceptable if older than 12 months
- Maximum of 1registered in the last 24 months
- Total amount must be no greater than £1,500
Unsecured credit arrears
- Unsecured credit arrears acceptable if accounts are now up to date (max status of 2 in last 12 months)
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Our Step Down fixed rate is applying 2 fixed rates over a duration of a 5 year fixed term. The first rate is applied for 2 years of the loan, followed by a lower rate for the remaining 3 years of the loan.
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Mortgage Brain & Trigold
The Step Down rate products will source as 5 year fixed rates
- The “initial rate” will show as the first step rate, and so the initial monthly payment will be based on this higher rate
- For an accurate comparison, compare based on “true cost over initial term” as this will be calculated using the higher step rate for the first 2 years and the lower step rate for the remaining 3 years
- To see the detail of each of the rates and the monthly payment – go into the notes section of “produce an illustration”.
The Step Down rate products will source as Stepped fix rates so please ensure that this rate type is selected in the filters
- The “initial period” will show as 24 months (as the first step is fixed for 24 months)
- The “initial rate” will show as the first step rate, and so the initial monthly payment will be based on this higher rate - If you choose to do a comparison based on “true cost over initial term” it will only be based on the higher first step rate for 2 years
- For an accurate comparison, compare based on “true cost over 60 months” (this can be input in “true cost & fee details section”) as this will be calculated using the higher step rate for the first 2 years and the lower step rate for the remaining 3 years
- To see the detail of each of the rates and the monthly payment – go into the notes section of “produce an illustration”.
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- Your client has the security of a 5 year fixed term, knowing that their payment amounts will reduce after 2 years.
- Over the duration of their 5 year fixed term, your client will be paying less than if they took out the standard 5 year fixed term on Resi 12.