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Other mortgage products (Products (Islamic Home Finance (Ijara (Bank…
Other mortgage products
Products
Foreign currency mortgages
Features
UK mortgage in foreign currency
Sub-prime mortgage
Features
State benefits assessed
High arrangement fee/ERCs
Interest banding dependant on history
Lower LTVs
Guarantee mortgage
Features
Higher lending
Guarantor in event of default
Affordability on own and guarantee mortgage
Guarantors 65+ unlikely
Guarantor req. independent advice required
Assigning savings to loan for a fixed period
Islamic Home Finance
Ijara
Bank ownership
25yr lease part capital/part rent
Ownership transferred at end of lease
Murabaha
Bank sells property for increased price
Immediate ownership
Capital repayments 20% of purchase price
Buy-to-let
Consumer buy-to-let
Not wholly or predominately for business purposes
Assessed under MCOB affordability rules
Business buy-to-let
Income
20-25k single income
20-25k one applicant of joint income
30k combine joint income
Term
Max age 75, 25yr term
Features
Borrower own a main residence
LTV 75-80%
Fixed/discount products
Arrangement fee/ERCs
PRA affordability test
Interest coverage ratio (ICR)
Industry standard 125%
Income affordability
Other rental income
Employment
Pensions
Savings and investments
Future changes to income
Interest rate affordability stress test
Min 5yr interest rate projections
2% increase
Min 5.5% starting point
Mitigate against inflation