Hodge reduces affordability stress rate calculations, which will allow it to grant loans of nearly 20% to average customers.
The lender noted that the move applies to its residential, residential retirement and retirement-only interest-only products.
It illustrates a 17% increase in co-applicants with a household income of £45,000.
Clients with revenue of £75,000 may increase by nearly 20% from their borrowing capacity.
Emma Graham, director of business development at Hodge, said: “As a future first-time buyer buys more buyers, after years of savings, affordability can often be the last major hurdle.
“These buyers are usually in their 30s and are usually looking for homes in family-friendly areas and have space to support growing families.”
Graham added: “Affordability after retirement remains a pressing issue, especially when clients need evidence of life under retirement interest and retirement loan products.
“By simplifying future affordability calculations, Hodge’s changes will make it easier for retirees (many of whom experience a drastically declining income decline) to ensure mortgages that meet their evolving needs.”
“We know that affordability remains a barrier for many customers – whether it’s their first-time buyers in their 30s or browsing loan options later in life.”
Over the past four weeks, Natwest, Lloyds Banking Group, Santander and Accord Mortgages have also relaxed their affordability rules to allow more lending.
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 apply to home buyers who first enter the market, but they have not exercised.
