MHBS relaxing stress test, allowing for up to £55,000 additional lending – Mortgage Strategy

The marketplace Harborough Building Society has become the latest lender to alleviate interest stress tests on residential loans, allowing customers to borrow up to £55,000 when purchasing a home.

Mutual aid says its new rules mean that many clients will see an increase in their maximum borrowing potential, including new borrowers, people who hope to cash out, expats and high net worth individuals.

The new standard covers loans up to £5 million and will take effect immediately.

It explained that under the association’s new stress test, household income at a two-year discount rate of £100,000, looking for clients who are looking for mortgage repayments at a two-year discount rate.

These figures are based on common grade 2 residences with a two-year discounted product up to £3 million at a rate of 5.49%.

In recent months TSB, Barclays and Nationalalso simplified their affordability rules to allow tens of thousands of pounds of additional borrowing from first-time home buyers, movers and recontenders.

The lenders’ moves came after the Financial Conduct Authority said in March that lenders were “too cautious” to grant FTB home loans under current rules.

Financial Conduct Authority CEO Nikhil Rathi told the U.S. Treasury Commission that under existing regulatory rules, lenders have some degree of “flexibility” in their stress tests that they apply to first-listed home buyers who have not exercised.

“We’re seeing a welcome market shift in how affordability is assessed, and these changes are designed to provide more clients with complex needs for the products we already offer, including exclusive sole proprietorship solutions for multigenerational and joint borrowers, including interest-only transactions, and lending hats between our products, our products are not borrowed.”