In a message to all mortgage brokers, Halifax Bank have announced some exciting new mortgage affordability changes. Halifax have recently, like most other lenders, tightened their purse strings as a result of both the covid-19 pandemic and also the economic crisis. In the past Halifax was know as quite a generous lender, especially at higher LTVs like 85 and 90%, however Halifax mortgage affordability has gone down significantly over the last 12 – 18 months in an attempt to limit the financial risk that clients and the bank are taking. But, it seems that Halifax has had a recent change of heart and has announced some brilliant changes to their affordability.
What Are The New Halifax Mortgage Affordability Changes?
Halifax have announced the following which will come into affect from Monday the 13th of February in a statement which reads:
Your feedback has indicated a growing need for a more tailored approach to affordability to support the borrowing of a wider range of homebuyers. In response, we are introducing changes to our affordability model for specific criteria that will offer some more financially resilient customers greater lending.
This targeted enhancement ensures responsible lending while increasing the maximum amount available to customers who are borrowing at a maximum loan to value (LTV) of 75%, on a fixed term product of five years or more or are remortgaging to us without taking on additional borrowing. This could see the maximum lending amount increase by up to 9%, or around £25,000 on an average application.
From Monday 13 February our affordability calculation will show an enhanced maximum loan amount available up to 75% LTV for:
- Remortgage customers applying for a like for like loan amount with no extra borrowing
- Purchase or remortgage customers selecting a fixed rate product with a term of 5 years or more.
The affordability result at Decision In Principle (DIP) will include any enhancement which applies. A new question – ‘Fixed rate product with a term of 5 years+’ Yes/No – is being added to the ‘Loan screen’ at DIP stage so if the term of the product preferred by the customer is known this enhancement can be reflected even when a particular product has not yet been selected.
Not all customers will see an enhanced maximum loan because if a loan to income (LTI) cap applies this will cap the maximum loan amount available as normal. No enhanced maximum loan amount will show above 75% LTV.
Additionally, the calculator will show two maximum loan amounts including ‘An enhanced Loan amount may be available where a fixed rate product with a term of 5+ years is being chosen’. This second max loan amount will always be displayed but the figure may be the same as the standard maximum loan amount based on the LTV or if a LTI cap applies.
Speak To A Halifax Mortgage Advisor To Get More Lending
At Oportfolio we are experts in getting mortgages with Halifax and pushing mortgage affordability for our clients. If you or anyone you know is struggling to get the mortgage affordability they need, give our team a call today to see how we can help.