Santander ups LTV limits and maximum loan sizes in criteria overhaul

Santander has announced a series of mortgage criteria changes, effective from Tuesday 9th April.

The bank is increasing its LTV limits for large loans. For loans over £1 million and up to £2 million, LTV will increase from 75% to 85%, and for loans over £2 million and up to £3 million, LTV will increase from 70% to 75%.

To support the changes, Santander is increasing the maximum loan size on selected residential fixed rate products, including new build, and is also introducing new large loan products into the new business range.

The maximum loan size will increase from £1.5m to £3m on residential fixed products up to 75% LTV and from £1m to £2m on residential fixed products up to 85% LTV.

As part of the changes, Santander is withdrawing all 60%, 70% and 75% LTV two and five-year fixed large loan products with a £2,499 fee for loans above £1.5m and up to £5m and is launching new 60% LTV large loan products with a £1,999 fee for loans above £3m and up to £5m.

Interest-only changes

In addition, Santander is making changes to its interest-only lending policy.

The maximum loan term is increasing to 40 years from 25 years for new and existing customers who are increasing the interest-only amount.

Where the repayment vehicle is sale of property, the minimum equity needed is increasing to £300,000 from £250,000. This applies to new and existing customers who are increasing the interest-only amount.

Where any part of the mortgage is on an interest-only basis, the maximum LTV for the overall lending is 85%. Where there’s a combined gross income of £200,000 or more, any lending over 75% LTV must be on a capital and interest basis. For applicants with a combined gross income of less than £200,000, any lending over 50% LTV must be on a capital and interest basis.

Other residential policy changes

From Tuesday 9th April, Santander is updating its affordability calculator to take into account the 2024/2025 tax year changes.

In addition, the child benefit threshold is increasing to £60,000 from £50,000. Child benefit shouldn’t be included where the applicant receiving the benefit or their partner's total gross income is above £60,000.

All full mortgage applications submitted from 6am on Tuesday 9th April will be assessed using the new lending policy.