Leeds Building Society has announced improvements in the way it assesses mortgage affordability, following clarification from the FCA about stress testing rules.
The Society will reduce affordability stress testing rates by up to 1.24%, allowing it to lend up to £34,000 more (based on a high earner with two children).
The changes, effective Friday 27 June, will benefit borrowers buying their first house, moving up the property ladder, or remortgaging their existing home. Applicants could be able to borrow between £9,000 and £34,0005 more following the changes.
The announcement follows the launch of the Society's Income Plus mortgage range which allows first-time buyers with a minimum household income of £30,000 to borrow up to 5.5 times their earnings.
Andy Moody, chief commercial officer at Leeds Building Society, said: “We welcome the recent clarification on lending rules by the FCA which will allow us to support more people onto and up the property ladder and support the government’s plan for growth.
“Stress testing requirements have unduly held some borrowers back from achieving their home ownership aspirations, so we are pleased to be able to lend up to £34,000 more as a result of these changes in affordability assessments.
“We continue to implement prudent affordability checks to allow us to continue lending responsibly, as we have done for the past 150 years.”
