Thousands of would-be homeowners could soon find it easier to step onto the property ladder after HSBC became the latest major lender to loosen its mortgage affordability checks.
Following the lead of Halifax and Santander, HSBC has announced significant changes to the way it assesses applicants’ finances. By reducing the so-called ‘stress rate’ — the rate used to test whether borrowers could still afford their mortgage if interest rates were to rise — the bank is now offering many buyers the chance to borrow more money than before. On average, hopeful homeowners could see an extra £39,000 added to the amount they are eligible to borrow.
The move comes at a time when competition among lenders is heating up. With mortgage rates steadily falling — some two-year fixed deals are now dipping below 4% — banks and building societies are adjusting their lending policies to attract more customers. In real terms, this means those who might have struggled to meet affordability tests just months ago may now find themselves in a much stronger position.
First-time buyers, in particular, stand to benefit the most from HSBC’s decision. Many have faced an uphill battle in recent years as soaring house prices and higher living costs squeezed affordability. The ability to access a larger loan could bring many previously out-of-reach properties within budget, potentially helping thousands more realise their dream of homeownership.
While the changes offer a welcome boost, experts are urging borrowers to proceed with caution. A lower stress rate does not mean rates won’t rise again in the future, and it’s important for buyers to be realistic about what they can truly afford over the long term. Stretching finances to the absolute limit might open more doors initially but could cause problems further down the line if financial circumstances change.
HSBC’s decision follows similar moves by Halifax and Santander earlier this year, both of whom trimmed their affordability rates, making loans more accessible. The shift signals a broader change across the mortgage market, with lenders keen to stimulate demand after a turbulent period.
At Quick Mortgages, we’re here to help you navigate these evolving opportunities. Our experienced team offers expert, fee-free advice to ensure you find the mortgage that’s right for you, not just the biggest loan possible. Whether you’re taking your first step onto the property ladder or looking to move or remortgage, we’ll guide you every step of the way.
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Disclaimer:
This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.
While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.
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