Borrowers taking out a mortgage with Santander will potentially be able to access thousands of pounds more after the lender introduced new rules.
The bank has announced improvements to its loan-to-income thresholds which mean more customers can access borrowing at five times their income and even up to 5.5 times in some cases.
Standard borrowing thresholds have always restricted lenders to offering loans at 4.5 times a borrower’s income. But new rules announced by the Bank of England in July mean lenders can offer bigger loans to more customers.
As a consequence of this, Santander has announced changes meaning customers earning less than £45,000 can access 4.45 times their income across all loan-to-value (LTV) levels.
Those earning between £45,000 and less than £100,000 can access five times their income on all LTV levels up to and including 90%, and 4.45 times on 95% LTV. Meanwhile, those with an income of £100,000 or more can access 5.5 times their income on all LTV levels to and including 90%, and 4.45x on 95% LTV1
Customers looking to remortgage to Santander, across all LTV levels, can also access 5.5 times their income.
As a result of the changes, Santander calculates that customers will potentially be able to access thousands more. For example, joint applicants repaying a mortgage over a 25-year term with an £80,000 deposit or equity and an income of £75,000 for one applicant and £50,000 for the other would only have been able to borrow £556,500 before today’s rules were introduced. Now, they could borrow £687,500.
David Morris, head of homes at Santander UK, said: “The recent changes to the loan to income rules mark the latest in a series of affordability improvements in what is quickly becoming the ‘year of the buyer’.
“We’re pleased to reflect these changes in our policies which, when coupled with our recent changes to affordability and a record number of properties coming to the market, will hopefully help more would-be buyers access the money they need to buy the home of their dreams.
“We’ll continually look at where we can enhance and improve our lending policy to help buyers right across the board.”
