Santander has updated its residential affordability calculations, reducing affordability rates by 0.25%, aligning with the Bank of England’s recent base rate cut. The move comes alongside updates to household expenditure figures, reflecting changing financial conditions.
The adjustments are expected to impact customers seeking new mortgages, as well as those refinancing existing loans. Brokers can access Santander’s affordability calculator to evaluate how the new criteria affect their clients. This development follows the bank’s broader efforts to support intermediaries navigating an evolving mortgage landscape.
Adjusted Affordability Rates Reflect Shifting Economic Conditions
Santander’s decision to lower its residential affordability rates by 0.25% follows the Bank of England’s base rate reduction in February. This change comes as part of a broader review of mortgage affordability, incorporating revised household expenditure figures to provide a more accurate assessment of borrowers’ financial capabilities.
The lender has introduced these updates in response to ongoing economic shifts affecting mortgage lending. Brokers and mortgage applicants are encouraged to use the updated affordability calculator to determine how these changes will influence borrowing potential.
The recalibrated figures could allow some borrowers to access slightly higher loan amounts, though overall affordability remains subject to income and expenditure assessments.
According to Santander, these adjustments are part of its long-term strategy to support mortgage applicants while maintaining responsible lending practices.
The move also aligns with wider trends among high-street banks, as competitors such as Nationwide, HSBC UK, Lloyds, Barclays, and NatWest continue to refine their lending criteria in response to economic developments.
Santander Enhances Broker Support and Investment Incentives
Beyond mortgage affordability updates, Santander has also strengthened its broker support initiatives, aiming to streamline communication and customer retention. The bank will now proactively notify brokers when a client’s current mortgage deal is approaching maturity, ensuring that customers have access to guidance before their existing terms expire.
Additionally, Santander has launched a three-month prize draw for investment customers, offering 150 prizes totalling £30,000. To qualify, customers must invest in a Stocks and Shares ISA through the Santander Investment Hub between 18 February and 31 May 2025. Each £20 investment counts as one entry, with a maximum of 1,000 entries per account.
Gustavo Gallardo Alvarez, Head of Retail Investments and Insurance at Santander UK, highlighted the initiative, stating: “Our 2025 prize draw is yet another great reminder to not only make the most of your tax-free savings ahead of April’s deadline but also benefit from a chance to win one of 150 prizes.”
