Lenders reflect market by offering greater flexibility to homeowners

With the aim of supporting first-time buyers, Santander has added three new products to its high loan-to-value (LTV) range of mortgage products, while Halifax has made updates to its retirement lending policy.

Borrowers with deposits between 10 and 20% can now benefit from three new residential mortgages from Santander.

Prospective homeowners with a 20% deposit can access a fixed two-year rate of 1.84%(%APRC) from the lender’s range of high LTV mortgages.

Borrowers with a 10% deposit meanwhile have a choice of two products: a two-year fixed rate at 2.59%(%APRC) or a five-year fixed rate at 3.49%(%APRC).

Available for either remortgage or purchase, all three mortgages come with an arrangement fee of £995.

Santander has also reduced certain two and five-year fixed products and has removed the booking fee entirely on these deals.

Hot on the heels of Nationwide’s revision to its definition of retirement age last week, Halifax has amended its own affordability criteria for lending into retirement.

The lender will now allow applicant income beyond the state pension age, up to a maximum working age of 70.

The bank said that it would take into account earned income to calculate mortgage income, where there is a clear intention to work beyond state pension age.

If the mortgage term extends past 70, or the client’s state pension age, whichever is sooner, Halifax will continue to use ‘verifiable anticipated retirement income’ in the affordability assessment.

The maximum age at the end of the term remains 75.

A note to brokers said:

“An increasing number of people are working beyond their state pension age and to reflect your clients’ needs we are amending our lending into retirement policy.”

Jeni Browne, Mortgages for Business, said:

“These are both welcome adjustments from major high street banks, which respond not only to current market conditions but to the personal circumstances of modern day borrowers.

“Both Halifax and Nationwide’s recent policy adjustments to retirement age are a step in the right direction for older borrowers, but we would like to see more being done for those homeowners who can prove longer term affordability.

“At the very least we hope to see other lenders follow Halifax and Nationwide’s lead, expanding the options for mature homeowners as the notion of traditional retirement evolves.”