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Santander updates BTL affordability assessment

  • 07/06/2024
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Santander updates BTL affordability assessment
Santander has revised the way it calculates affordability for residential and buy-to-let (BTL) borrowers, effective from 10 June.

Santander will no longer capture details of a BTL property’s monthly running costs and will only base affordability on the rental cover. 

The lender’s rental cover rate will rise from 125% to 145% where any applicant has an income tax band higher than 20%. Where all applicants have an income tax band of 20% or less, the rental cover will remain at 125%. 

Santander’s BTL affordability rates are also changing. Its standard affordability rate will rise from 7.38% to 7.64%.

The five-year fixed affordability will reduce from 5.88% to 5.64% and the pound-for-pound remortgage affordability will decrease from 5.88% to 5.64%. 

For residential properties that are already let or to be let, Santander has increased the rental cover to 145% to determine if the retained property is self-financing. 

If the property is not self-financing, Santander will automatically consider the shortfall between the 145% figure and the rent when assessing the affordability of the new mortgage. 


AML question changes 

Santander has also updated the questions it asks for anti-money laundering (AML) purposes. 

Where any part of a borrower’s deposit has been gifted, the lender will ask for the occupation of the person providing the gift and how they obtained their money. 

Where any part of the deposit comes from the borrower’s own savings, Santander will ask how the customer generated their funds. 

This is the most recent tweak to Santander’s mortgage. Last week, it announced it was shortening the product transfer window from six to four months, as borrowers tended not to secure rates after the four-month mark.

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