Santander raises affordability charges – Mortgage Solutions

Santander has elevated affordability charges throughout residential and buy-to-let mortgages.

The change was utilized on Friday and noticed the residential affordability charge enhance in gentle of the bottom charge hikes in July and August. 

On its buy-to-let merchandise, the usual affordability charge has risen from 7.59 per cent to eight.52 per cent whereas the five-year mounted affordability charge has elevated from 6.09 per cent to 7.02 per cent. 

Its pound-for-pound buy-to-let remortgage affordability charge has additionally gone up from 6.09 per cent to 7.02 per cent. 

At the identical time, the lender has lowered the curiosity protection ratio (ICR) for increased tax band debtors to 140 per cent, down from 145 per cent. 

Santander mentioned full mortgage utility submitted by 10pm on 29 August wouldn’t be affected by the up to date affordability adjustments. 

It inspired advisers to make use of the web site affordability calculators to see what purchasers could possibly borrow. 

A troublesome atmosphere 

Brokers reacted to the raised buy-to-let affordability, saying it was making borrowing tougher for landlords. 

Peter Stamford, director and lead adviser at Moor Mortgages, mentioned with affordability going as much as 8.52 per cent, borrowing for brand spanking new and present properties “becomes a daunting task”. 

“This could force landlords to hike rents, further straining tenants already grappling with high costs,” he added. 

Elliott Culley, director at Switch Mortgage Finance, mentioned this added to the dangerous information for the buy-to-let market and mentioned lenders wanted to be supportive moderately than including additional stress.  

Culley added: “Buy-to-let is once again starting to become a specialist market. Right now if clients want to afford the lending on the buy-to-let, then they’d need to expect high fees or have a good income to utilise top slicing.”