HSBC eases mortgage stress test rules to boost lending by up to £39,000
HSBC has eased the stress test calculations it uses to determine how much applicants can borrow for a mortgage, meaning some first-time buyers will be able to borrow an additional £39,000.
In a move that could enable 20,000 more customers to get a mortgage with HSBC UK, alongside being able to borrow larger amounts as part of a mortgage, the bank is making changes to its stress rates used in the affordability calculations.
These changes come into effect immediately, with mortgages received from 22nd April being subject to the new stress rate calculations. The changes will benefit both customers purchasing or remortgaging a property.
With stress rates being an integral part of ensuring mortgage affordability for each application, reducing the rate at which a mortgage is calculated will broaden access to homeownership, helping individuals and families including first time buyers with home-buying aspirations. Where offers increase for first time buyers, the average increase in offer will be £39,000.
HSBC is the third large lender to announce it is offering more generous loan sizes following similar moves by Halifax and Santander for Intermediaries.
Oli O’Donoghue, HSBC UK’s Head of Mortgages, said "We understand the challenges faced by people looking to secure a mortgage. This adjustment to our stress rates, which will directly improve affordability for many aspiring homeowners, reflects our commitment to making homeownership more accessible. By carefully reviewing our affordability calculations, allowing more customers to meet affordability criteria and potentially access increased borrowing amounts, we are aiming to ease some of the pressure on prospective buyers so more people can realise their dream of owning their own home.”
The current combination of lower mortgage rates and more generous loan sizes is good news for many borrowers planning to get on the property ladder this year.
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The information contained within was correct at the time of publication but is subject to change.
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