Santander will increase the minimum LTV to 85% from 75% for all loans valued between £1 million to £2 million
Santander UK has announced a wider selection of products as it updated its mortgage policies for buyers.
Starting on April 9, Santander will employ the changes, including an increase in the maximum term offered on interest-only mortgages from 25 years to 40 years in line with its capital and repayment mortgages.
Applicants can also combine overall income of £200,000 or more to access up to 75% lifetime value products. This is an improvement from its previous policy of requiring a single applicant to earn at least £250,000.
Those applying for an interest-only mortgage with the intention of selling their property later to repay the mortgage must have at least £300,000 equity in the property. Previously, the value was at £250,000.
Santander also announced updates to affordability calculations. It will take child benefit into account for applicants who earn up to £60,000 following the increase to the high-income child benefit charge threshold, as well as the reduction in national insurance contributions for PAYE and self-employed applicants. This allows applicants to borrow more.
The commercial bank will also improve affordability by making changes to the LTVs on residential fixed rate largest loans. Santander will increase the minimum LTV to 85% from 75% for all mortgages valued between £1 million to £2 million.
These changes support customers in accessing an LTV product that may have been previously available to them, Santander said.
The changes supporting homebuyers follow amendments made earlier this year, with Santander introducing a range of 95% LTV mortgages.
Commenting on the announcement, Santander’s Graham Sellar said homeownership is a key focus for many people, but affordability can often be their “Achilles heel.”
“Today’s changes, including opening up interest only products for more people, while reflecting recent tax changes that improve people’s take-home pay in our affordability calculations, aim to address this and support more homeowners,” said Sellar, head of development for mortgages.
