The firm said the stress rate change was a “strategic move” to support a “broader range of borrowers”. This includes first-time buyers, homemovers and those looking to remortgage.
As an example, two applicants each earning £25,000 annually with a £300 monthly loan repayment over 25 years and no dependants could now borrow an additional £17,200 under the new criteria.
Vida Homeloans joins a raft of other lenders that have changed their residential stress rates in the past few months following the Financial Conduct Authority’s (FCA’s) clarification of the interest rate stress test rule application in March.
The lender has also launched a new range of limited-edition buy-to-let (BTL) products at 75% loan to value (LTV), available on a five-year fixed term.
The deals come with fee options of 4% and 7%, with rates starting from 3.9%, and aim to “offer greater flexibility and value to landlords seeking to optimise their portfolios”.
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Ross Williams, head of mortgage product management at Vida Homeloans, said: “Affordability continues to be one of the biggest barriers to homeownership, and at Vida, we’re committed to addressing it head-on. Our mission is to help more people find a place to call home, and that means designing solutions that make a real difference.
“That’s why we’re following up our popular 3&Easy, 97% LTV proposition with further enhancements to our mortgage affordability calculation, helping applicants borrow more.”
In an interview with Specialist Lending Solutions earlier this year, Vida Homeloans’ CEO said it was looking to double mortgage lending volumes this year and is eyeing significant savings growth with £2bn in deposits by the end of this year.
