Accord Mortgages has directly responded to the relaxation of limits on higher-loan-to-income (LTI) lending, with swift enhancements to its product range.
Under new guidance from the Financial Policy Committee major lenders will be able to top their current 15% loan-to-income ratio limits to allow for greater mortgage lending,
Lenders have been given the freedom to set their own responsible lending limits while the review takes place.
Yorkshire Building Society is introducing the changes first through its intermediary-only lending arm Accord Mortgages.
It is extending its popular ‘Boost LTI’ product, which provides access to mortgages up to 5.5x income, to first-time buyers borrowing 95% loan-to-value, from 16 July, as well as reducing the minimum income threshold for this product from £75,000 to £50,000.
The lender will also reduce its minimum income threshold for lending up to five times income from £75,000 to £50,000.
Several further planned enhancements are scheduled and will be made available to direct customers before the end of the month.
Yorkshire BS director of mortgages Ben Merritt commented: “Last week’s announcement by the regulators was exactly what we have been campaigning for, to loosen the shackles and enable us to support even more borrowers – and particularly first-time buyers, in being able to buy homes.”
He added: “The simple fact is that there are customers, including first-time buyers, who can afford to borrow more than 4.5 times their income, who have been shut out of this market by the existing regime.
“We can now offer them a lifeline to borrow what they need for their dream home in line with our commitment to responsible lending. This is crucial in the current economic environment where house prices in many parts of the UK continue to rise at a faster rate than incomes.”
As reported earlier by Mortgage Strategy, Nationwide has expanded its Helping Hand mortgage, aimed at first-time buyers, which lends at up to six times’ income.
Eligible FTBs can apply for the home loan with a £30,000 salary from tomorrow, down from £35,000, and joint applicants with a £50,000 combined salary — down from £55,000.
