Some couples applying for a mortgage with Santander could see their borrowing capacity increase by as much as £130,000 overnight. This follows the bank’s decision to loosen its lending criteria, giving certain applicants the chance to secure a much larger loan than before.
Santander is not the only lender making changes. In recent months, a number of banks and building societies have updated their rules in response to calls from the City regulator and the Bank of England. Both bodies have been keen to improve mortgage accessibility, particularly for those struggling to get on the property ladder despite having the income to support repayments.
While several lenders have introduced higher borrowing limits, mortgage brokers note that Santander’s approach stands out. In some cases, the bank is allowing higher earners with smaller deposits to borrow up to 24% more at a single stroke – a move that is more generous than most of its competitors.
To demonstrate the difference, Santander shared an example involving a couple with an £80,000 deposit or equivalent equity in their current home. One partner earns £75,000 annually, and the other earns £50,000. Before the change, they could borrow a maximum of £556,500 for a standard mortgage over a 25-year term. After the change, their borrowing limit increases to £687,500 – a rise of £131,000, or 24%.
Not every applicant will see such a significant increase. In some scenarios, the uplift might be around 12%, while in others it could be closer to 4%. The exact amount will depend on the applicants’ income levels and the size of their deposit or equity.
Many of these changes in the mortgage market have been driven by adjustments to “stress test” rules. These tests assess whether borrowers could still afford their repayments if interest rates were to rise. Some lenders have relaxed these requirements, making it easier for applicants to pass affordability checks.
Others have raised their loan-to-income (LTI) limits, which traditionally capped lending at 4.5 times a borrower’s income. Increasing this cap allows people – particularly higher earners – to access larger loans, enabling them to consider more expensive properties or buy in competitive markets.
The Financial Conduct Authority weighed in on the matter in March, suggesting that some affordability checks were unnecessarily blocking access to mortgages that borrowers could realistically afford. In July, the Bank of England introduced fresh guidance allowing lenders to offer more high LTI mortgages, opening the door for changes such as those now seen at Santander.
Santander’s latest update is the result of a review of its LTI policies. The new system takes into account an applicant’s overall income and their deposit size, or the equity they hold if they are remortgaging, to determine how much they can borrow.
Under the revised rules, applicants with a combined annual income of £100,000 or more can now borrow up to 5.5 times their income at any LTV ratio up to 90%. This effectively means that only a 10% deposit – or equivalent home equity – is needed to qualify for these higher limits.
Mortgage broker Aaron Strutt, of Trinity Financial, noted that while many lenders have introduced changes recently, Santander is unusual in offering such a sizeable boost in borrowing to higher earners who do not necessarily have large deposits.
For those looking to move home or buy for the first time, this could be a game-changer. Higher borrowing limits mean greater flexibility in property choices, potentially allowing buyers to purchase in more desirable locations or secure a home that better meets their needs.
However, financial experts also warn that larger loans must be taken on responsibly. While more generous lending can help people buy sooner or move up the property ladder, it also means taking on greater long-term financial commitments, particularly in a market where interest rates could still fluctuate.
David Morris, head of homes at Santander UK, described 2025 as “quickly becoming the year of the buyer”. He expressed confidence that these changes will make it easier for more buyers to access the funds they need to purchase their ideal property.
With several major lenders already easing their restrictions and more expected to follow, competition in the mortgage market looks set to heat up further this year. For many would-be homeowners, the timing could not be better.
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