The mutual said this would improve affordability options for borrowers, and the change applies to two-, three- and five-year fixed rates.
Newcastle Building Society said this could improve the potential amount borrowers can access, covering its full product range including shared ownership and interest-only.
The firm said the stress rate change would align with the “growing demand for accessible mortgage solutions and reflects the lender’s purpose to help more people to own their own home”.
Newcastle Building Society said the change would support brokers with “enhanced borrowing options” for customers.
Franco Di Pietro (pictured), head of intermediary mortgages at Newcastle Building Society, said: “We are committed to supporting our intermediaries and their clients in navigating the complexities of today’s mortgage landscape. The reduction in our residential stress rate is intended to boost borrowers’ affordability and demonstrates our dedication to making homeownership more achievable.
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“Our residential stress rate is just one of the ways we measure affordability as part of our approach to ensuring responsible and sustainable lending, and we believe this move will empower brokers to help more clients secure the funding they need.”
Newcastle Building Society is the latest to change its stress rate following the Financial Conduct Authority’s (FCA’s) updated guidance earlier this year.
Recent lenders that have changed their stress rates include Skipton Building Society, Nationwide, Hodge, Accord Mortgages, NatWest, HSBC and Precise.
