Santander has detached the rules for mortgage loans in a relocation so that customers can borrow up to £ 35,000 more.
The lender is the first to reduce his rules for the affordability of mortgage in response to a phone call from the financial regulator, the Financial Conduct Authority (FCA), to Borrowing limitations.
Santander said from today that it had reduced the affordability percentages of the residential to 0.75% – the lowest levels since 2022.
This means that ‘many customers’ request a living mortgage from the lender to be able to borrow between £ 10,000 to £ 35,000 today than yesterday.
However, this depends on the individual circumstances of customers and would be subject to checks, such as the loan to income ratios.
David Morris, Head of Huizen, Santander UK said: “Helping customers to reach their home owner dream is an important priority for Santander, but we know that affordability restrictions continue to bite.
“We are pleased to be the first large lender who responds to the updated FCA guidelines, in addition to the introduction of a series of reduced mortgage interest today, play our role as responsible lender and help more customers to borrow what they need to release their home ambitions.”
After the financial crisis in 2008, strict credit rules were introduced to prevent borrowers from falling into difficulties.
According to these regulations, when a mortgage provider assesses the income of a potential borrower, they look at how they can afford the mortgage, the interest rates were to increase in the future.
But with the interest rates, the FCA thinks that the current approach to these stress tests can limit access to mortgages for many.
Santander’s Leen Shift In response to the FCA, there has been some worries that there could be a return to the days of reckless loans.
Emma Jones, director of Whoushebankenno.co.uksaid to the newspaper agency, said: “This will undoubtedly offer a real boost to borrowers, but we must be careful that we do not return to the Wild West that was the mortgage world in the years prior to the worldwide financial crisis.
“More flexibility is welcome, but it should not be at the expense of endanger borrowers.”
But others welcomed a less careful approach to lenders. Katy Eatenton, mortgage and protection specialist at Lifetime Wealth ManagementAlso said to the newspapers, said: “This step from Santander could really give the real estate market, especially if other lenders follow their example as you imagine that they will do that.
“Although some will fear that this could be an ominous step back to the kind of loans that existed before 2008 and the global financial crisis, I don’t think this is the case. Lenders have long memories and will be very wary of those dark days.”