Halifax offering larger mortgage loans with a five-year fix
Halifax for Intermediaries has announced it will provide larger mortgage loans for some borrowers when they take a five-year fix. The move could mean the maximum lending amount increases by up to 9% or around £25,000 on an average application.
The bank says that feedback from mortgage brokers has “indicated a growing need for a more tailored approach to affordability to support the borrowing of a wider range of homebuyers."
In response, Halifax is introducing changes to its affordability model, which it uses to calculate maximum mortgage loan sizes, and it will offer some “more financially resilient customers” greater lending.
Who will benefit from the changes?
Halifax highlights this targeted enhancement ensures responsible lending while increasing the maximum amount available to customers borrowing a maximum loan-to-value of 75% on a fixed-term product of five years or more. Also, those remortgaging to the bank without taking on additional borrowing.
Affordability calculations will show an enhanced maximum loan amount available up to 75% loan-to-value for remortgage customers applying for like-for-like mortgages with no extra borrowing. Also, purchase or remortgage customers select a fixed rate product for five years or more.
Not all customers will see an enhanced maximum loan because if a loan-to-income cap applies, this will cap the maximum loan amount available as usual. No enhanced maximum loan amount will show above 75% loan-to-value.
Two mortgage loan sizes shown
Halifax's mortgage calculator will show two maximum loan amounts, including ‘an enhanced loan amount may be available where a fixed rate product with a term of 5+ years is being chosen’. A second maximum loan amount will also be displayed, but the figure may be the same as the standard maximum loan amount based on the loan-to-value or if a loan-to-income cap applies.
Aaron Strutt, product director at Trinity Financial, says: "Some of the other lenders, including Nationwide, Santander and NatWest provide more generous income multiple to some remortgaging customers and those purchasing a property. This is not a new policy, but it is a big move by Halifax."
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