Santander Tightens Mortgage Lending for the Self-Employed

The impact of the pandemic on lending criteria continues to be felt by self-employed borrowers in particular with Santander limiting maximum loan-to-values (LTVs) for new residential applications to 60 per cent.

Self-employed applicants now require at least a 40 per cent deposit. The lender said this was to help manage current service levels following the latest lockdown and school closures and is intended as a temporary measure. Existing Santander customers who are self-employed and moving home or those taking out a buy-to-let mortgage will not be affected by the changes.

Santander also said that it will not lend to self-employed borrowers whose businesses are not trading as a result of Covid-19 restrictions.

Santander is not alone in imposing lending restrictions on self-employed borrowers. Nationwide has also reduced the maximum LTV for the self-employed to 85 per cent, even though it will lend up to 90 per cent for first-time buyers. Metro Bank is asking for more supporting evidence for the self-employed, including six months of bank statements, while businesses need to have been trading for at least three years.

While it is trickier for self-employed borrowers to get a mortgage, it is not necessarily impossible. Advice is more important than ever, which is where a whole-of-market broker such as AWS can help. We know which lenders consider self-employed applicants more favourably and can advise on the best lender for your circumstances. Get in touch for more information.
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