Following the launch of its 100% LTV product last week, Rachael Hunnisett (pictured), director of mortgage distribution at April Mortgages, said she was encouraged by the volume and quality of business coming through so far, adding: “Brokers are working really hard on these cases pre-submission.” 

Hunnisett said the reactions to the launch, whether negative or positive, had been “incredible” and showed “how engaged people are with this topic”. 

April Mortgages saw visits to its website surge by more than 60 times after the no-deposit mortgage was launched, and the team had taken calls from customers who said they now felt like they had the chance to buy a home. 

Brokers have already given April Mortgages feedback on how to evolve the product, which is currently not available on new-build properties or flats, and Hunnisett said this was being fed back into its planning. 

Hunnisett added: “We’ve got an incredible product roadmap, and it definitely isn’t the end of innovation for April, it’s just the very beginning, which is very exciting.” 

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Levelling the playing field 

When asked why April Mortgages decided to bring out a 100% product and not something between 95% and 100% to encourage even a small amount of security, Hunnisett said no-deposit lending was already happening across the market through the Bank of Mum and Dad. 

“All we’re doing is levelling the playing field between those that have the Bank of Mum and Dad to get a deposit and those that haven’t, and making sure we recognise those saving for their first home or ready to get back on the housing ladder,” she said. 

April Mortgages is “really comfortable” with the product from a risk perspective and felt it was doing the right thing.

Hunnisett said as long as a borrower could afford the mortgage, had a good credit score, and passed affordability, “why shouldn’t we be helping people into homeownership if we can provide them the safety of 10-year lending, making sure they’ve got at least a decade to know exactly what their mortgage payment will be but also the freedom to get out of it if they want to?” 

There is also an “enhanced contact strategy”, where April Mortgages will get in touch with borrowers to ask if they can make overpayments and build equity faster. 

Further, the product is only available on an advised basis, and the lender has resources for brokers to keep them informed of any risks clients might come across. 

Keeping borrowers on track 

Regarding concerns about negative equity, Hunnisett said the term was so long that borrowers were likely to have built up equity, and should be fine even if house prices did not rise. If a borrower were to find themselves in negative equity, April Mortgages has a product transfer range it can offer. 

“It’s not that they can’t access another rate, they’re not stuck on a floating rate, we make sure that we give them options. 

“Before it even got to that, if we saw a customer getting into that situation, as part of the annual health check we do with them, we would suggest they increase their payments, which also works with the rate, which decreases over time,” she added. 

More choice for customers 

Speaking of the launch of Gable Mortgages’ own 100% LTV product, Hunnisett said she welcomed more lenders in this space as it gave borrowers more choice. She said she did not want to see a 100% LTV mortgage in the two-year space as it took time to build equity, which was why the April Mortgages product offered that longer-term certainty. 

“If you’re that high LTV and then you’ve got a rate shock, that could have a really big impact,” she added.