The changes to the stress tests, which are used by lenders to measure borrowers’ abilities to manage a loan if the rates are higher when they come to the end of their fixed rate period, come into force from 15 April.
The lenders said they would lower the stress rate used in their standard affordability calculation and enhanced affordability offered for five-years-plus products.
Each stress test is unique to each lender, with specific figures not shared, as they could be commercially sensitive.
The banks said this will mean borrowers will be able to borrow more than they can currently, noting that typical customers could see rises of around 13% to the maximum loan available.
For a family, this could be equal to around £38,000, the lenders said.
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As an example, for two adults with two dependants and a household total income of £75,000 on a 25-year term with typical credit limits, the current maximum loan at 75% loan to value (LTV) for a fixed rate of fewer than five years or a tracker deal is £286,005. This would rise to £324,520 under the changes.
For a fixed rate of five years or more, the current maximum loan stands at £317,500 and the new maximum loan is £331,785.
Amanda Bryden, head of Halifax Intermediaries, said: “This is brilliant news for many would-be homebuyers who have struggled to either get on or move up the housing ladder, or those simply looking to get a better mortgage deal.
“It is always a careful balance when calculating whether a loan is affordable, both now and in the future. While they are just one part of measuring affordability responsibly, the application of these new stress rates means a typical family could potentially borrow over £38,000 more and make it easier to turn their dream home into a reality.”
