Santander Eases Lending Rules Allowing Homebuyers to Borrow Significantly More

Santander has introduced sweeping changes to its mortgage lending policies, making it easier for certain higher-earning couples to borrow substantially more towards their home purchases. The move comes after interventions by the City regulator and the Bank of England, which have encouraged lenders to open up the market amid concerns that traditional tests were unnecessarily excluding would-be buyers.

The bank revealed that couples on good salaries but with only modest deposits could now borrow up to £130,000 more than they could just days ago. For example, a pair with an £80,000 deposit—one earning £75,000 a year and the other £50,000—will see their maximum borrowing jump from £556,500 to £687,500, an increase of 24% resulting directly from the revised rules.

Brokers in the industry point out that while several lenders have made their lending criteria more lenient in recent months, few have matched Santander’s willingness to extend such a significant boost to higher earners with smaller deposits. Some potential buyers may only witness a 12% or 4% rise in their borrowing limits, depending on individual circumstances, but the new caps could be transformative for many.

A key feature of Santander’s new policy is an enhanced loan-to-income cap. Applicants with a combined annual income of £100,000 or more can now access up to 5.5 times their income, so long as they have at least a 10% deposit or equivalent equity—well above the traditional 4.5:1 ratio adhered to by numerous banks.

The changes are part of a broader industry trend, following feedback from the Financial Conduct Authority, which highlighted that some affordability tests may have been too restrictive. With the Bank of England relaxing its guidelines on high loan-to-income loans, Santander’s update has arrived at a pivotal moment for the housing market.

David Morris, head of homes at Santander UK, observed that 2025 is ‘quickly becoming the year of the buyer’ as more options open up for home seekers. Many in the property sector will be eager to see whether other lenders follow suit, unlocking greater flexibility and access for people aiming to secure their dream homes.