Santander updates mortgage policies to give buyers a wider selection of products

  • Santander to offer 40-year interest-only mortgages to allow customers a greater choice of repayment options
  • 75% LTV interest-only products are now open to joint applicants with a minimum income of at least £200,000
  • Increases to maximum loan size on selected residential fixed rate products up to 85% LTV
  • Changes to National Insurance and Child Benefit reflected in affordability calculations

From Tuesday 9 April, Santander will be making a number of changes to its lending criteria. The changes will enable would-be homebuyers to access a wider range of products.

Interest only changes
Santander is increasing the maximum term it offers on interest-only mortgages to 40 years in line with its capital and repayment mortgages, up from 25 years. It is also enabling applicants with a combined overall income of £200,000 or more to access up to 75% LTV products, rather than requiring a single applicant to earn at least £250,000. 

Customers applying for an interest-only mortgage, who also intend to sell their property later as their way to repay the mortgage, must also now have at least £300,000 equity in the property, previously this was £250,000.

The amends to interest-only mortgages support customers in accessing a wider choice of mortgages depending on what is right for their individual circumstance.

Updates to affordability calculations
Santander will take Child Benefit into account for those earning up to £60,000 following the increase to the High-Income Child Benefit Charge threshold, as well as the reduction in National Insurance contributions for PAYE and self-employed applicants, enabling applicants to borrow more.

Changes to larger loans 
Santander will also make changes to the LTVs on residential fixed rate larger loans to help improve affordability. For all mortgages between £1,000,000 and £2,000,000, Santander is increasing the minimum LTV from 75% to 85%.

These changes support customers in accessing an LTV product that may have previously been unavailable to them.

Graham Sellar, Head of Development, Mortgages said: “Home ownership is a key focus for many, but affordability can often be people’s Achilles heel. Today’s changes, including opening up interest only products for more people, while reflecting recent tax changes that improve people’s take-home pay in our affordability calculations, aim to address this and support more homeowners.”

The latest changes to support homebuyers come on the back of changes made earlier this year which introduced a range of 95% LTV mortgages.

Customers can find out more information about Santander mortgages on the Santander website.

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Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. At 31 December 2023, the bank had around 19,800 employees and serves around 14 million active customers, 7 million digital customers via a nationwide 444 branch network, telephone, mobile and online banking. Santander UK is subject to the full supervision of the FCA and the PRA in the UK. Santander UK plc customers’ eligible deposits are protected by the FSCS in the UK.

Banco Santander (SAN SM, STD US, BNC LN) is a leading commercial bank, founded in 1857 and headquartered in Spain. It has a meaningful presence in 10 core markets in the Europe, North America and South America regions, and is one of the largest banks in the world by market capitalization. Santander aims to be the best open financial services platform providing services to individuals, SMEs, corporates, financial institutions and governments. The bank’s purpose is to help people and businesses prosper in a simple, personal and fair way. Santander is building a more responsible bank and has made a number of commitments to support this objective, including raising €220 billion in green financing between 2019 and 2030. At the end of 2023, Banco Santander had €1.3 trillion in total funds, 165 million customers, 8,500 branches and over 212,000 employees.