How Mortgage Lenders Are Easing Restrictions to Help More First-Time Buyers in 2025

A growing number of mortgage lenders have started to relax borrowing rules to help more people onto the property ladder. With falling interest rates and regulatory support, lending practices are shifting to make homeownership more accessible. Banks including Santander, Halifax, Lloyds, and Nationwide have made it easier for customers to secure a mortgage by reducing deposit requirements, increasing loan amounts, and softening affordability checks.

Changes in Borrowing Criteria

In recent months, major lenders have eased their borrowing criteria to make it easier for customers to secure a mortgage:

• Santander has adjusted its affordability criteria, allowing some borrowers to access up to £35,000 more in mortgage funds. The bank has also lowered the stress test rate used in assessing applications, meaning a couple with a combined income of £49,500 could now borrow nearly £14,000 more than they could previously.
• Nationwide, the UK’s largest building society, has increased its mortgage offering to up to six times a first-time buyer’s salary, a significant rise from the traditional lending multiples of four to five times income.
• Halifax and Lloyds have also eased their affordability rules, enabling some homebuyers to borrow more.

Lower Deposit Requirements for First-Time Buyers

Deposit requirements are being reduced across the industry. The number of mortgages available to buyers with only a 5% deposit is now at a 17-year high, which is especially beneficial for first-time buyers who often struggle to save large deposits while paying rent.

Interest Rate Reductions

Along with easing borrowing criteria, some banks have also cut interest rates:

• HSBC has implemented rate reductions across its mortgage products.
• The Co-operative Bank recently relaunched its mortgage range with cuts of up to 0.26 percentage points.
• Barclays became the first major lender to offer fixed-rate deals below 4% in early April.

Encouragement from the Financial Conduct Authority (FCA)

These moves are in line with encouragement from FCA, which has called on lenders to reassess affordability tests in light of changing market conditions. The FCA emphasised that while lending should remain responsible, it should also be flexible enough to reflect current economic realities for borrowers.

Expert Legal Support for Your Mortgage and Home Purchase

As mortgage lenders ease borrowing rules and make homeownership more accessible, it’s important to have legal guidance through the process. Whether you’re navigating new lending criteria or securing your first home, our team, accredited by the Law Society Conveyancing Quality Scheme, is here to help. We ensure your legal aspects are handled with care and clarity, from contract review to completing your purchase.

Contact us today for expert advice on buying or selling your home in this changing mortgage market.