Virgin Money and Clydesdale Bank have relaxed loan-to-income ratios, giving customers access to higher borrowing multiples.  

The firms, which are both part of the Virgin Money group, say contractors are no longer limited to loans of 4.49 times income.   

Also, higher earners and remortgage customers, with no additional borrowing, now have increased access to their 5.5 times multiple.  

Their loan-to-income changes cover:  

Purchase or remortgage with additional borrowing  

• Income under £50,000 – 4.49 times  
• Income £50,000 to £74,999 – 5 times  
• Income of £75,000, or more – 5.5 times  

They add that a maximum of 4.49 times of lending applies at all income levels to any of the following:  

• Over 85% loan to value  
• Any part of the mortgage is interest only  
• Any applicant is self-employed — not including contractors meeting our contractor policy  
• Shared Ownership  

To determine the £50k/£75k income levels, and when applying loan-to-income multiples the lenders say they will include the following of the two highest earning applicants — basic pay, 60% of allowable variable income, and 100% of pension.  

Remortgage with no additional borrowing  

• Up to 85% LTV – 5.5 times  
• Over 85% LTV – 4.49 times  

The banks say that for a remortgage with no additional borrowing, income level and self-employment don’t affect loan-to-income limits.   

The loan to income is a maximum of 4.49 times if any part of the mortgage is interest only.  

Clydesdale Bank still offers up to 5.5 times for eligible newly qualified professional applicants taking a newly qualified professional product.  

Virgin Money head of secured lending Craig Calder says: “Virgin Money is committed to supporting people in meeting their financial goals, whether that’s getting onto the housing ladder or switching to a deal that gives them value for money.   

“That’s why we’ve made changes to our affordability assessment to better reflect customers’ individual situations, providing most customers with improved lending amounts.   

“We’ve also reviewed our loan-to-income criteria to make it more simple and straightforward.”