Hodge said this would help those buying their first home in later life or those managing affordability in retirement.
The firm said the change would boost borrowing potential by around 20% for the average Hodge customer.
As an example, joint applications with a household income of £45,000 could borrow just over £38,000, a 17% rise.
Customers with an income of £75,000 could benefit from around 20% more borrowing capacity.
The update applies to its residential, residential retirement and retirement interest-only (RIO) product ranges.
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Emma Graham, business development director at Hodge, said: “With more first-time buyers purchasing later in life, affordability can often be the last major hurdle after years of saving for a deposit.
“These buyers, often in their 30s, are typically seeking homes in family-friendly areas with the space to support growing families. This increase in borrowing power could mean the difference between a two- and three-bedroom property, or the garden space they’ve worked so hard for.”
She continued: “Affordability into retirement continues to be a pressing concern, particularly where customers need to evidence affordability for life under RIO and retirement lending products.
“By easing future affordability calculations, Hodge’s change will make it easier for retirees – many of whom experience a significant drop in income – to secure mortgages that meet their evolving needs.”
Graham added: “We know affordability remains a barrier for many of our customers – whether they’re first-time buyers in their 30s, or navigating lending options in later life.
“This change is a practical, customer-focused step to help more people secure the homes that suit their needs, both now and in the future.”
Hodge is the latest lender to lower its stress rate, with Accord Mortgages, NatWest, HSBC and Lloyds Banking Group all making similar changes in the past few weeks.
