Effective from 9th April, the maximum loan to value (LTV) for loans more than £1m up to £2m will rise from 75% to 85%.
For loans of more than £2m and up to £3m, the maximum LTV will go up from 70% to 75%.
Santander said it would also raise the maximum loan amounts to align with these changes.
For residential fixed rate mortgages up to 75% LTV, the maximum loan size will increase from £1.5m to £3m, while up to 85% LTV, this will go up from £1m to £2m.
Santander will withdraw all large loan products at 60%, 70% and 75% LTV, fixed for two and five years, with a £2,499 fee for loans above £1.5m and £5m.
It will launch two- and five-year fixed large loan products at 60% LTV with a £1,999 fee for loans above £3m and up to £5m.
No changes will be made to residential tracker mortgages.
Interest-only and affordability changes
Santander will increase the maximum loan term for interest-only mortgages from 25 years to 40 years for both new and existing borrowers who are increasing the interest-only amount.
Where the repayment vehicle is the sale of the property, the lowest equity required will rise from £250,000 to £300,000. This will apply to new and existing borrowers raising the interest-only amount.
Where any part of a mortgage is on an interest-only basis, the maximum LTV for overall lending will be 85%.
For borrowers with a combined gross income of £200,000 or more, lending over 75% LTV must be on a capital and interest basis. Where borrowers have a combined gross income of less than £200,000, any lending over 50% LTV must be on a capital and interest basis.
Santander will also update its affordability calculator to account for the 2024/25 tax changes.
It will raise the Child Benefit threshold from £50,000 to £60,000, but this will not be included where the applicant receiving the benefit or their partner’s total gross income is more than £60,000.
Last month, Santander reviewed its affordability policy to allow Universal Credit benefits to be considered as a secondary income.
Related: Mortgage choice improves as fixed rate mortgage costs rise
