Financial Times - Santander imposes loan-to-salary limit
Santander this week tightened its mortgage affordability rules for first time buyers, constraining borrowers to 4.49 times their salary, down from 5 times.
The move follows a cut last week by Barclays/Woolwich in its loan-to-income ratio for all mortgages from 5.5 times salary.
In a note to mortgage brokers, Santander for Intermediaries said: “This change reflects our continued prudent approach to lending and affordability and is in line with current market conditions.”
Aaron Strutt, product manager at broker Trinity Financial, told FT.com the decision from Santander, formerly one of the most generous lenders to first-time buyers, would force some to turn to alternative lenders.
“They may also struggle to understand why all of Santander’s other customers will still be able to borrow up to five times their salary.”
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