Santander has decided to ease up on its money-lending rules, meaning homebuyers are in for a treat. It is one of the many lenders who have eased their criteria when it comes to lending, following the Bank of England and the Financial Conduct Authority’s new guidelines.
The changes come in a bid to help more young people finally get onto the property ladder. This news now means that buyers can borrow up to 5.5 times their income when they decide to apply for a mortgage with the bank, unlocking thousands of pounds.
These big changes will see customers earning less than £45,000 able to borrow 4.45 times their income across all loan-to-value levels. Those earning between £45,000 and £100,000 can borrow five times their income on mortgages with a loan value up to 90% and 4.45 times their income on products with a loan value of 95%.
Similarly, those borrowing from the bank that earn £100,000 or more can access 5.5 times their income on mortgages of up to 90% LTV. Although the amount will decrease to 4.5 times their income on 95% LTV products.
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’,” Sky News reports.
An example provided by Santander explains: “A couple with an £80,000 deposit where one earns £75,000 a year and the other makes £50,000 would be able to borrow £687,500 under the changes, assuming a standard mortgage and a 25-year term.”
It elaborated that you could have borrowed up to £131,000 from before the changes, when the maximum would have been £556,500. It further read: “For a single homebuyer, with a £30,000 deposit, a standard mortgage over a 25-year term, earning £75,000 a year, the changes unlock an extra £33,000, taking their maximum borrowing to £300,000.”
