Santander has become the first large lender to reduce the affordability rate of homes for borrowers who want to buy or cash out.
As of now, interest rates for all residential mortgage lenders have been reduced by 0.75%, the lowest level since 2022.
This means that many clients applying for residential mortgages from Santander, UK can now borrow between £10,000 and £35,000 than yesterday.
The entire difference that can be borrowed depends on the client’s personal circumstances and is subject to income restrictions on affordable checks and loans.
The lender said the move was in response to the FCA’s call earlier this month, requiring lenders to better meet customer needs in a market with falling interest rates to increase affordable interest rates and design products.
David Morris, home director at Santander UK, said: “Helping clients to realize their dream of owning their homes is a key focus in Santander, but we know that affordability limits continue to bite people.
“We are delighted to be the first major lender to respond to the latest FCA guidelines, while introducing a range of reduced collateral rates that fulfill our role as a responsible lender while helping more clients borrow what they need to unleash their family aspirations.”
Earlier this year, Santander made three key commitments to brokers aimed at improving experiences in the middle of mortgages.
