Lending criteria changes at The Mortgage Works

All the information detailed in this announcement is effective from Friday 25 February 2005.

Commenting, Paul Howard, Associate Director - Portman Group Intermediary Sales said, "These changes underline our commitment to the market as a specialist lender offering competitive products accompanied by a flexible and transparent lending criteria. Our latest proposition gives borrowers with a proven track record in the Buy-to-Let market more freedom to further develop their existing portfolio. We have also increased the LTV limit for self-cert lending and this again fits with our strategy of maximising the lending potential of capable borrowers whilst maintaining a responsible approach in this section of the marketplace. Our new affordability calculation has been greeted by intermediaries with huge approval.

"We are constantly reviewing the residential investment market in order to remain in tune with the requirements of borrowers and intermediaries. To this end, we have also launched three new Buy-to-Let mortgages which we think are attractively priced and have the additional bonus of no arrangement fee", Howard concluded.

Criteria Changes:

Buy to Let

- The maximum LTV for Buy-to-Let business has been increased to 85%. The loan bandings have also been revised and are as follows:

Multi property and experienced single property landlords First Time Landlords

LTV Loan Amount LTV Loan Amount

85% £350,000 75% £500,000

80% £500,000 70% N/A

75% £750,000 65% £1m

70% £1m 60% £1.5m

65% £1.5m

- Capital raising up to a maximum of 85% LTV for any legal purpose.

- Loans for expatriates will no longer be loaded by 0.50%.

- New 2, 3 and 5 Year Fixed Rate products have been introduced that carry

NO ARRANGEMENT FEE – a full product guide follows this press release.

Rental Income Requirements

Maximum LTV Rental Income Ratio Required

85% 125%

75% 120%

70% 115%

65% 100%

50% Non Status

Rental calculations are on a monthly interest calculation and based on 5.99% (or actual initial pay rate if higher). This excludes the 3 and 5 year fixed products which use the current pay rate.