Nationwide has slashed its stress rate for all residential affordability calculations to 6.74% following the Bank of England’s decision to cut the base rate to 0.25% earlier this month.
The lender’s lower stress rate will include all applications, including equity share, and will apply to all cases started or reprocessed on or after 24 August.
Nationwide said most customers will see a small increase in the amount it will lend to them, subject to criteria.
In July 2014, Nationwide increased its stress rate for all mortgage deals to 6.99% following guidance from the Financial Policy Committee that recommended all lenders should apply a stressed rate which assumed a growth in base rate of 3%.
Barclays also relaxed its stress test for residential borrowers earlier this month, citing lower interest rates as the reason to improve mortgage affordability for its borrowers.
