Hodge has eased affordability stress rate calculations, which will allow it to grant loans that are almost 20% larger for average customers.
The lender points out that the move applies to its residential, residential retirement and retirement interest-only products.
It gives an example of joint applicants with a household income of £45,000, which can now borrow just over £38,000 more, a 17% increase.
Customers with an income of £75,000 could benefit from almost 20% more borrowing capacity.
Hodge business development director Emma Graham says: “With more first-time buyers purchasing later in life, affordability can often be the last major hurdle after years of saving for a deposit.
“These buyers, often in their 30s, are typically seeking homes in family-friendly areas with the space to support growing families.”
Graham adds: “Affordability into retirement continues to be a pressing concern, particularly where customers need to evidence affordability for life under retirement interest-only and retirement lending products.
“By easing future affordability calculations, Hodge’s change will make it easier for retirees — many of whom experience a significant drop in income — to secure mortgages that meet their evolving needs.”
“We know affordability remains a barrier for many of our customers — whether they’re first-time buyers in their 30s, or navigating lending options in later life.”
In the last four weeks, NatWest, Lloyds Banking Group, Santander and Accord Mortgages have also relaxed their affordability rules to allow more borrowing.
The moves from these lenders come after the Financial Conduct Authority said in March that lenders have been “too cautious” in granting FTB home loans under current rules.
Financial Conduct Authority chief executive Nikhil Rathi told the Treasury Committee that under existing regulatory rules lenders have a degree of “flexibility” over the stress tests they apply to homebuyers coming to the market for the first time, which they have not exercised.
