Residential mortgage lender Gen H has started to differentiate between its two and three-year and its five-year products in its stress testing. This change will enable some aspiring homeowners to borrow up to 25% more on five-year products.

Gen H says it has already made a difference, as In one instance, a married couple earning approximately £20,000 and £40,000 respectively with moderate monthly commitments needed £289,000 to purchase a home – but under the previous stress rate structure, the loan was unaffordable.

Following the stress rate changes, they were able to borrow a maximum of £303,000 on a five-year product and purchase the home they wanted.

Meanwhile, the lender is introducing two new loan-to-income multiple (LTI) caps: applications with a gross income of less than £50,000 and cases with income boosters will be subject to a 4.49x LTI cap. Existing LTI caps remain unchanged.

Intermediaries on Gen H’s panel will see the changes reflected within their application journeys on Gen H Pro, the lender’s case management platform.

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.”