Hodge has announced a reduction in its affordability stress rate calculations, designed to support more customers in achieving their mortgage aspirations.
The change will unlock nearly 20% more borrowing potential for the average Hodge customer.
For example, joint applicants with a household income of £45,000 could now borrow just over £38,000 more — a 17% increase — while customers with an income of £75,000 could benefit from almost 20% more borrowing capacity.
This update will apply to customers across Hodge’s Resi, Resi Retire and retirement interest-only (RIO) product ranges.
The move follows recent FCA guidance encouraging lenders to reassess their affordability models, noting that excessively high stress tests could restrict access to mortgages for borrowers who would otherwise be able to afford them.
Emma Graham (pictured), business development director at Hodge, commented: “With more first-time buyers purchasing later in life, affordability can often be the last major hurdle after years of saving for a deposit.
“These buyers, often in their 30s, are typically seeking homes in family-friendly areas with the space to support growing families. This increase in borrowing power could mean the difference between a two- and three-bedroom property, or the garden space they’ve worked so hard for.
“Affordability into retirement continues to be a pressing concern, particularly where customers need to evidence affordability for life under RIO and retirement lending products.
“By easing future affordability calculations, Hodge’s change will make it easier for retirees — many of whom experience a significant drop in income — to secure mortgages that meet their evolving needs.
"We know affordability remains a barrier for many of our customers — whether they’re first-time buyers in their 30s, or navigating lending options in later life.
“This change is a practical, customer-focused step to help more people secure the homes that suit their needs, both now and in the future."
