High-net-worth individuals will be able to borrow significantly more from Investec Bank following a substantial reduction in residential mortgage stress rates.
The private bank has lowered its stress testing thresholds by up to 2.10%, in response to updated guidance from the Financial Conduct Authority.
According to the bank, the move means eligible borrowers could now access between 10% and 30% more funding than was previously available, subject to affordability assessments and loan-to-income limits.
Peter Izard, head of intermediary business development at Investec Bank, said: “These changes will enable our clients to secure the property they want by increasing their borrowing capacity. We have already reduced rates in both fixed and variable rate products and halved our residential mortgage arrangement fees, making us even more competitive in the market.
“In response to the recent FCA guidance, we have now reduced our stress rates, allowing high-net-worth clients to access higher loan amounts. This ensures that Investec continues to serve our clients with the service and flexibility they need to fulfil their lending aspirations.”
The bank has shared illustrative examples showing the impact of the change. A borrower with an annual income of £300,000, no dependents or debt, and £66,000 in yearly expenditure would previously have been able to borrow £949,000 on a two-year fixed rate mortgage. Following the stress rate reduction, that figure rises to £1,096,000 – a 15.5% increase.
For a more complex case involving a borrower with £550,000 annual income, two dependents, £5,000 in monthly debt and £128,000 in annual expenditure, Investec said the new borrowing potential increases from £1,102,000 to £1,358,000 on a two-year fixed rate – a rise of over 23%.
The stress rate changes follow a broader overhaul of Investec’s mortgage offering for high-net-worth clients. The lender recently reduced tracker mortgage rates by as much as 58 basis points, while fixed rates have been cut by up to 30 basis points. Residential mortgage arrangement fees have also been halved from 1.00% to 0.50%, with a cap now in place for owner-occupier borrowers.
Investec said the combined effect of lower pricing and more generous stress testing would help clients achieve their property goals at a time when affordability remains a key concern for many buyers at the upper end of the market.
