Gen H has made changes to its residential stress rates to help make its options more affordable to borrowers.
As part of the affordability-related change, Gen H will now differentiate between two-, three- and five-year products in its stress testing, which it said could allow customers to borrow up to 25% more on five-year deals.
Gen H said the change had already made a positive impact; in one case, a married couple earning around £20,000 and £40,000 respectively needed £289,000 to buy a home. The previous stress rate made this unaffordable.
After the change, the borrowers were able to obtain up to £303,000 on a five-year fix.
Gen H said other borrowers would similarly be able to benefit from the changed stress rate on its five-year products.
The lender is also introducing two loan-to-income (LTI) multiple caps. Applicants with a gross income of less than £50,000 and borrowers with income boosters will be able to access a 4.49x LTI cap. According to Gen H’s criteria, income boosters are people who are added to a mortgage to improve a borrower’s borrowing power.
This has brought Gen H in line with the wider market, and other LTI caps remain unchanged.
Pete Dockar (pictured), chief commercial officer at Gen H, said: “The volatility that has characterised the interest rate environment over the last year has a lot of customers searching for stability.
“For many, a longer fixed interest term is just the thing. That’s what makes this change so positive – customers can find the longer-term peace of mind they’re hoping for without sacrificing affordability.”
Earlier this month, Gen H made a series of mortgage rate reductions to better support borrowers.
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
