Santander will boost its loan-to-income ratio to up to 5.5 times, which will allow some joint income applications for high earners to lift their borrowing by almost a quarter.
The high street lender says its new lending rules, which come to market tomorrow, also simplifies its repayment and interest-only LTI multiples, and lifts the bank’s LTI multiples for loans up to 90% loan to value for repayment mortgages.
The bank says for combined incomes of £100,000 or more, LTI will rise to 5.5 times for repayment loans of up to 90% LTV and interest-only loans up to 8%% LTV.
For combined incomes between £45,000 and £100,000, LTI will rise to 5 times for repayment loans of up to 90% LTV and interest-only loans up to 8%% LTV.
The lender says these changes will mean:
- 75% to 85% LTV — combined incomes of £100,000 or more could borrow an extra 10%
- 85% to 90% LTV — combined incomes of £45,000 to less than £100,000 could borrow an extra 12%
- 85% to 90% LTV — combined incomes of £100,000 or more could borrow an extra 24%
A range of lenders, such as Nationwide, Newcastle Building Society and Precise, have lifted their LTI ratios after the Financial Policy Committee changed its rules to allow firms to underwrite more high loan-to-value lending in July.
Trinity Financial product and communications director Aaron Strutt says: “Santander is making some big changes to its affordability calculations with the aim of lending more money.
“Lots of the banks and building societies have made changes to their lending rules recently, but not many of them are offering to provide up to 24% more to borrowers with smaller deposits, even if they are higher earners.”
