Move allows borrowers to qualify for larger loans amid shifting market conditions
Barclays has made changes to its affordability assessments for residential mortgages, lowering stress rates for both purchase and remortgage applications starting today, May 19.
The adjustment means some applicants may now qualify to borrow significantly more. According to Barclays, a typical family could see an increase of up to £30,750 in their borrowing capacity, depending on their financial profile and credit history.
“We are delighted to increase the amount we can lend to customers looking to buy a home,” said Lee Chiswell, head of mortgages at Barclays. “We know there are many challenges facing people right now, whether it’s a first-time buyer trying to pull a deposit together or a family looking to move house.
“Improving our affordability rates could help make many customers’ dream home a reality, while continuing to have strong measures in place to ensure that they can make payments on their mortgage.”
Stress testing remains a key part of the mortgage process, designed to ensure that borrowers can manage repayments even if interest rates rise. However, as rates have stabilised, some lenders have begun adjusting these calculations to better reflect the current market environment. The FCA has also called on lenders to tailor their affordability assessments to better meet customer needs in a market where interest rates are gradually falling.
The change in Barclays’ affordability rates aligns Barclays with other major UK lenders — such as HSBC, Halifax, Lloyds Bank, and Santander — that have recently adjusted their stress testing practices.
The update is also part of a wider push by Barclays to broaden access to home ownership. Earlier this year, the bank introduced Mortgage Boost, a product allowing relatives or friends to increase a buyer’s borrowing capacity without offering a loan or gift. Barclays also launched a zero-deposit option for Right to Buy purchasers and raised the maximum loan amounts for high loan-to-value (LTV) purchases to £640,000 for houses and £310,000 for flats — measures aimed at helping buyers secure homes in more expensive areas with smaller deposits.
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