The criteria change could help those looking to buy their first home later in life, or borrowers managing affordability in retirement.
What’s new?
The change will unlock nearly 20% more borrowing potential for the average Hodge customer, said the lender.
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 RIO product ranges, helping unlock the homes which better fit their needs.
Emma Graham, business development director at Hodge, said: “With more first-time buyers purchasing later in life, affordability can often be the last major hurdle after years of saving for a deposit.
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“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.”
She added: “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.”
This 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.
