Mortgage Lenders Softening Criteria

Published / Last Updated on 07/12/2022

Across the mortgage, loan, and finance industry, every day we are starting see more lenders softening their position given recent interest rate increases meaning pressure on existing borrowers to pay their mortgages and new borrowers to even secure a mortgage offer.

Given the expectation that inflation may start to fall back, and interest rate increases may slow down according to the Bank of England, lenders are making it easier on borrowers:

  • Joint Borrower Sole Proprietor (JBSP) mortgages are being expanded to include siblings and children.  These are family type mortgages where parents usually back the mortgage with you as guarantors or use their own home as security but lender criteria is now being widened to include other family members.
  • Lenders are softening their mortgage affordability stress test rates.  It is usual for lenders to check that you can afford the mortgage today but also you can afford the mortgage when/if interest rates rise.  The rates used for stress test rates appear to be lowering.
  • Mortgage interest rates are falling as lenders take on board the hint from the Bank of England and the Federal Reserve that they may slow down interest rate rises.
  • More lenders are reintroducing their buy to let mortgage range, and some are reducing the ratio of the rental income required as a % of the mortgage payments due.
  • Many commentators are forecasting that the average 5-year fixed rate mortgage will fall below 5% next year.


It is to be expected that lenders will soften their position if markets are stabilising.  In addition, with property prices now falling, lenders will feel safer that they are not lending on overvalued property.

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