Nationwide has announced a major change to its affordability calculation from today. The high street lender has reduced its stress rates by between 0.75 and 1.25 percentage points.

A stress test is used to determine whether a borrower can afford to continue to pay their mortgage if interest rates rise. This is normally set at a certain percentage point above the lender's standard variable rate (SVR).

says the change means borrowers will be able to borrow £28,000 more on average from today. It applies to first-time buyers - who can also benefit from the Helping Hand mortgage, which lets eligible applicants borrow up to six times their income - as well as home movers fixing their deal for at least five years.

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The largest boost to the borrowing amount is expected on remortgages where there is no additional borrowing. Nationwide says these fall outside the flow limit and are therefore unlikely to be capped at 4.5 times income.

Nationwide estimates that a first-time buyer using the Helping Hand mortgage and with a £55,000 salary will see the maximum amount they can borrow jump from £304,200 to £330,000.

Someone moving home with an income of £75,000 will be able to borrow £336,800, up from £307,000, while those who are remortgaging on a £45,000 salary will be able to borrow up to £278,100, up from £235,500.

Henry Jordan, Nationwide’s Director of Home, said: “Affordability remains a key challenge and this change, along with our well-established and popular Helping Hand proposition, shows we’re serious about tackling it.

“Whilst the FCA’s clarification on affordability stress rates could support increased levels of home ownership, the Bank of England’s flow limit dampens its potential impact.

“That’s why Nationwide continues to call for a review of the 15% limit, so that we, and other lenders, can help more people access the long-term benefits of home ownership.”

Santander was the first major lender to reduce its stress test rates and said it means someone applying for a residential mortgage can now borrow between £10,000 to £35,000 more, depending on their individual circumstances.

HSBC also followed suit, and said 20,000 more customers are able to get a mortgage, alongside being able to borrow larger amounts. The average increase in offer for first-time buyers will be £39,000.

Lloyds Banking Group has also reduced the stress rates used in its standard affordability calculation and on its five-year fixed mortgages. and said it could mean someone applying for a mortgage could borrow £38,000 more.

This includes Lloyds, Halifax, Bank of and BM Solutions.