Latest news with #housingladder
The Sun
12-08-2025
- Business
- The Sun
The mortgage lender that lets first-time buyers borrow 5.5 times their income – and you don't need a huge deposit
A MAJOR mortgage lender is allowing first-time buyers to borrow up to 5.5 times their income to help them get on the housing ladder. Santander has become the latest bank to ease its lending rules - and homebuyers only need a 10% deposit to borrow. 1 Under the new rules, Santander customers earning less than £45,000 will be able to borrow 4.45 times their income. Those earning between £45,000 and £100,000 will be able to borrow five times their income on mortgages with a loan to value (LTV) up to 90%. Santander customers earning £100,000 or more can borrow 5.5 times their income on mortgages up to 90% LTV. Your LTV is how much your bank is lending you, with the rest of the property being paid for with your deposit. So if your deposit is 10%, then your LTV will be 90%. The changes mean first-time buyers could get access to thousands of pounds more to put towards their home. For example, a couple earning £75,000 and £50,000 respectively, with an £80,000 deposit, would be able to borrow £687,500, assuming a standard mortgage and a 25-year term. The maximum they would have been able to borrow before the changes was £556,500 - marking a £131,000 increase. Santander head of homes David Morris said: 'The recent changes to the loan to income rules mark the latest in a series of affordability improvements in what is quickly becoming the 'year of the buyer'. "We're pleased to reflect these changes in our policies which, when coupled with our recent changes to affordability and a record number of properties coming to the market, will hopefully help more would-be buyers access the money they need to buy the home of their dreams. "We'll continually look at where we can enhance and improve our lending policy to help buyers right across the board.' The Sun's James Flanders explains how to find the best deal on your mortgage Several other high-street lenders have loosened their lending rules in recent months, after the Bank of England (BoE) introduced new borrowing guidelines. The new rules meant that banks and building societies could offer more high loan-to-income mortgages up to or more than 4.5 a borrower's annual income. Nationwide now allows customers to borrow six times their annual income through its Helping Hand scheme, and you only need a 5% deposit. However, the offer is only open to people taking out a five or ten-year fixed mortgage. It comes after mortgage rates fell for millions last week after the Bank of England cut interest rates for the fifth time since 2020. The base rate, which impacts interest rates offered by banks on loans and mortgages, was cut from 4.25% to 4%. Several major lenders, including HSBC, Barclays and Nationwide, announced they would be cutting their tracker and SVR mortgage rates following the decision. How to get the best deal on a mortgage There are different factors that go into getting the best mortgage rate. Chris Sykes, technical director at broker Private Finance explains what you need to know. Bigger deposit The larger the deposit you have the lower the rates you'll have access to. The different deposit tiers offered by lenders are generally 0-1% deposit, 5%, 10%, 15%, then generally it skips to 25% and finally cash or equity of 40% or more. There are some exceptions in between but these are usually the bands. Lenders then set different rates for each of these tiers, rather than having one rate for a 12% deposit and another for 14%, for example. With a deposit above 40% there is usually no price fluctuation, which means you'd get the same rate with a 50% deposit to a 40% deposit. Keep your credit score healthy A better credit score doesn't necessarily mean more competitive deals, but a negative credit could mean worse deals. For example, there may be some people with not a lot of credit as they've never had a credit card, or loan, will get the exact some deal as someone who has more credit history and a better credit score. However, a bad credit history or score starts to limit your lenders and means you may need to move off high street to a more specialist lender which tends to offer higher rates. If you have poor credit, look for easy ways to improve it. Look six months before your fix ends It's best to look at deals six months before a current rate ends. This might be to just have a chat with a broker and get things moving. It might be that you can get a deal lined up and locked in that protects against movements in interest rates - for example if rates were to go up over the following six months. And you can also then improve the rate within that six months if rates were to go down. How to find a good broker A good mortgage broker is invaluable for navigating the options available to you. The best way to find a good adviser is through personal recommendations, everyone has a friend or family member who will have recently bought or refinanced – ask them who they used and if they were happy with the service. You can also lookup reviews of that person online to find other customer experiences too. is one place where people can offer their reviews. Sort your paperwork IF you are looking to buy or remortgage, contact a broker nice and early, as they can then guide you through what the expectations are from lenders. This gives you plenty of time to make sure your accounts are up to date if you're self-employed and you can see if it is worth filing tax returns early.
The Sun
14-07-2025
- Business
- The Sun
First-time buyers to get ‘leg up' onto housing ladder under mortgage plans unveiled by government
FIRST-TIME buyers will be given a 'leg up' onto the housing ladder under plans to be announced by the Chancellor today. Rachel Reeves is expected to announce sweeping changes for those looking to buy a house. 1 More mortgages will be available at over 4.5 times a buyer's income, which will create more than 36,000 additional mortgages for first-time buyers over the first year, the Government said. It follows recommendations from the Bank of England that some lenders can offer more high loan-to-income mortgages if they choose to. The reforms, which the Chancellor hails as having an "instant impact" on consumers, will be outlined in Leeds today ahead of Ms Reeves' Mansion House speech on this evening. Britain's biggest building society Nationwide also announced plans last week to make its "Helping Hand" mortgage scheme for first-time buyers available to people on lower incomes. From Wednesday, eligible first-time buyers can apply for Nationwide's Helping Hand mortgage with a £30,000 salary, down from £35,000, and joint applicants with a £50,000 combined salary – down from £55,000. It is estimated this will support an additional 10,000 first-time buyers each year. In her Mansion House speech, the Chancellor is expected to tell the City of London: 'I welcome the recent changes the (Bank of England) Financial Policy Committee has announced to the loan-to-income limit on mortgage lending, which the PRA (Prudential Regulation Authority) and FCA are implementing immediately.' She will hail the reforms as having an "instant impact for consumers, such as Nationwide offering its Helping Hand mortgage to more first-time buyers – supporting an additional 10,000 each year.' The changes will sit alongside the creation of a permanent mortgage guarantee scheme, pledged by Labour in its manifesto, and a review of Financial Conduct Authority (FCA) lending rules that could allow prospective buyers' records of paying rent on time to be used to show they can afford mortgage repayments. The reforms have been welcomed by mortgage experts, who say it will make a huge difference to Brits on lower incomes. 5 things to check before applying for a mortgage Mortgage technical manager Nicholas Mendes, of broker John Charcol, said: 'The decision to widen access to Nationwide's Helping Hand mortgage by lowering the income thresholds will offer an immediate and practical benefit to a group of people who have often found themselves just on the wrong side of affordability criteria. 'For someone earning £30,000 on their own, or couples on a combined income of £50,000, this change could be the difference between continuing to rent and finally being able to move into a home of their own. 'It will also bring particular value to those in stable, lower-paid roles that are so essential to society but are often overlooked by traditional lending models. 'People working in care, education, retail, and public service are typically in long-term employment and manage their finances carefully, yet they are the very people who have found the doors to homeownership closed to them. 'This reform suggests that financial discipline is being recognised more broadly than by salary alone, and that is a very welcome shift." What else is being announced by the Chancellor? The Chancellor is also expected to announce the launch of a permanent mortgage guarantee scheme, which will see the state offer to help first-time buyers and home movers with deposits as low as 5pc. First announced in last month's Spending Review, it is set to replace the previous mortgage guarantee scheme, which came to and end on June 30. The scheme provides a guarantee that the Government will cover some of a lender's losses if a borrower can't afford to repay their mortgage and the home is repossessed. Meanwhile, plans to cut the tax-free allowance for cash ISAs have been put on hold by the Chancellor, after speculation that reforms to the savings account would also be announced. Cash ISAs currently offer tax-free interest on savings of up to £20,000. It's understood that the Chancellor has now scrapped the plans following backlash from banks, building societies and campaigners, and will instead focus on encouraging more people to invest in stocks and shares. In her Mansion House speech this evening, she is expected to add: 'This is the foundation of an economy, and a country, that is more active and more confident. 'Where people and businesses look to the future and talk about hope about opportunity. Assured of their own capability, and of the ability of our country to boldly face the challenges that lie ahead. 'And certain of the prize if they succeed. Of higher wages and higher living standards. 'The renewal of Britain in every home and every high street. To put it simply: a Britain that is better off.' How to get the best deal on your mortgage IF you're looking for a traditional type of mortgage, getting the best rates depends entirely on what's available at any given time. There are several ways to land the best deal. Usually the larger the deposit you have the lower the rate you can get. If you're remortgaging and your loan-to-value ratio (LTV) has changed, you'll get access to better rates than before. Your LTV will go down if your outstanding mortgage is lower and/or your home's value is higher. A change to your credit score or a better salary could also help you access better rates. And if you're nearing the end of a fixed deal soon it's worth looking for new deals now. You can lock in current deals sometimes up to six months before your current deal ends. Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost. But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal - but compare the costs first. To find the best deal use a mortgage comparison tool to see what's available. You can also go to a mortgage broker who can compare a much larger range of deals for you. Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender. You'll also need to factor in fees for the mortgage, though some have no fees at all. You can add the fee - sometimes more than £1,000 - to the cost of the mortgage, but be aware that means you'll pay interest on it and so will cost more in the long term. You can use a mortgage calculator to see how much you could borrow. Remember you'll have to pass the lender's strict eligibility criteria too, which will include affordability checks and looking at your credit file. You may also need to provide documents such as utility bills, proof of benefits, your last three month's payslips, passports and bank statements.
