Santander has relaxed its mortgage affordability criteria, allowing some homebuyers to borrow up to £35,000 more—a move that could give a much-needed boost to buyers navigating today’s housing market.
The changes, which took effect last Friday, follow guidance from the Financial Conduct Authority (FCA) encouraging lenders to ensure affordability checks aren’t unnecessarily restrictive. Santander is one of the first major lenders to respond with tangible changes.
Under the new rules, a first-time buyer couple earning a combined £49,500 could now borrow £210,352 on a two- or three-year fixed-rate mortgage—an increase of nearly £14,000. Similarly, a couple with a joint income of £63,500 could see their borrowing potential jump by almost £21,000, up to £305,326, on a five-year fixed deal.
As part of the adjustment, Santander has also reduced its mortgage stress test rates by up to 0.75%. Previously, borrowers were assessed at a full percentage point above the lender’s standard variable rate (currently 6.75%). That rate has now dropped to between 6% and 7%, easing pressure on applicants’ affordability assessments.
David Morris, head of homes at Santander UK, said the bank’s goal is to help more people achieve the dream of homeownership, while continuing to lend responsibly.
Mortgage broker David Hollingworth from L&C welcomed the move but noted that loan-to-income caps still apply—so borrowers already near their maximum limit may not see a dramatic increase. However, for those previously constrained by stress tests, this could make a real difference.
The change signals a broader shift in the mortgage market as lenders look to support buyers in an improving economic landscape, with falling interest rates and rising buyer demand.
