Move increases borrowing capacity for homebuyers, movers and remortgage clients
Borrowers applying for a mortgage with Halifax, BM Solutions, Bank of Scotland or Lloyds Bank may now qualify for larger loan amounts, following revisions to the lenders’ affordability calculations.
From today, the lenders – all part of Lloyds Banking Group – have reduced the stress rates used in standard and enhanced affordability assessments — tools that estimate a borrower’s ability to repay if interest rates were to rise in the future.
The shift in methodology could result in higher maximum loan amounts, depending on individual circumstances. For some customers, the lowered stress rates may equate to an increase of around 13% in borrowing power. According to lender estimates, this could mean up to £38,000 more in available funding.
The updated rates apply to applicants across various segments, including first-time buyers, home movers and remortgage customers.
“This is brilliant news for many would-be homebuyers who have struggled to either get on or move up the housing ladder, or those simply looking to get a better mortgage deal,” said Amanda Bryden, head of Halifax Intermediaries.
“It is always a careful balance when calculating whether a loan is affordable both now and in the future. While they are just one part of measuring affordability responsibly, the application of these new stress rates means a typical family could potentially borrow over £38,000 more and make it easier to turn their dream home into a reality.”
The change, the lenders said, reflect their aim to provide more flexible borrowing options while continuing to uphold responsible lending standards. Applicants must still undergo full affordability assessments before final loan decisions are made.
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