On Friday 25 July, Santander for Intermediaries will be making key changes to its residential lending policy.
Interest-only:
- To ensure that customers have sufficient equity in their property to enable them to sell and downsize at the end of the mortgage term, the minimum equity buffer will be increased to £150,000 for interest-only applications where sale of the mortgaged property is used as the repayment vehicle.
- To reduce the risk of customers being unable to repay the outstanding loan as they approach retirement, the maximum age at maturity will now be 65 years for applications where any element is on interest-only.
Buy-to-let applications will not be affected by this change.
New build improvements:
To demonstrate our on going commitment to the UK housing market, supporting both First Time Buyers and Movers purchasing a new build home, we are making the following improvements:
- Maximum mortgage term for Help to Buy equity loan scheme is increasing from 25 to 35 years.
- Maximum LTV for new build flats is being increased from 75% to 80%.
The maximum LTV for buy-to-let new build flats remains unchanged at 70% LTV.
Help to Buy mortgage guarantee scheme:
- To align with changes in the scheme rules, the maximum income multiple for mortgages under the Help to Buy: mortgage guarantee scheme must be less than 4.5 times income.
Affordability changes:
- The Affordability Calculator will now display a single indicative maximum loan amount rather than different amounts for low, medium and high credit scores.
- At the same time Santander for Intermediaries will be updating the Office for National Statistics (ONS) data it uses to verify clients’ stated expenditure.
- From Friday 25 July the updated Affordability Calculator will be available on the Santander for Intermediaries website.
Managing pipeline applications:
All Full Mortgage Applications (FMAs) already submitted through Introducer Internet by the close of business on Thursday 24 July will not be affected and will continue to be progressed on existing residential lending policy.
Any cases submitted as an FMA from Friday 25 July, or where a material change is made to an FMA submitted before 25 July, will be assessed using the new residential lending policy rules.
