The biggest change coming in from 11 April, is that it will no longer group self-employed applicants into Covid-impacted or non-Covid-impacted.

Government support payments, including the Self-employment Income Support Scheme (SEISS), will count as income for the purposes of affordability.

Santander is changing its definition of a Covid-19 impacted self-employed borrower to now only capture details of outstanding support loans. Santander will remove its Covid-19 question and simply ask borrowers to confirm any outstanding loans. 

It previously categorised self-employed applicants as adversely impacted by the pandemic if their business was not currently trading or had been re-opened for less than three months.   

Borrowers were also deemed to be impacted by the pandemic if they had taken a SEISS grant or if a limited company received a Job Retention Scheme (JRS) grant.

Additionally, those who had taken a bounce-back loan, Business Interruption Loan (BBIL) or Coronavirus Business Interruption Loan (CBIL) in the 12 months prior to the date of application would have been considered adversely affected by the pandemic.  

This definition also included self-employed managers whose staff had previously been furloughed due to business trading conditions in the 12 months before the date of application. 

Any undisclosed outstanding loans will lead to a declined application. 

Further, it will take an average of the last two years’ income or the most recent year if this is lower. For existing borrowers moving home, Santander said its underwriters may be able to use a more individualised assessment. 

The loan to value (LTV) limit of 75% (25% deposit) will still apply for applications where any of the applicants are self-employed. This limit will not apply to existing borrowers who are moving home.

Santander confirmed its usual pipeline rules apply so all full mortgage applications already submitted by close of business on Saturday 9 April won’t be affected by these changes. Any full mortgage applications submitted from 6am on Monday 11 April, or where a material change is made to an existing application submitted before close of business on Saturday 9 April will be assessed using its updated lending policy.