New policy allows eligible buyers to borrow up to 5.5 times income
HSBC UK has revised its mortgage policy, allowing first-time buyers to borrow up to 5.5 times their annual income. The lender said the move is intended to improve access to home ownership for those entering the property market for the first time, while maintaining established standards for responsible lending.
The new loan-to-income (LTI) ratio is available to first-time buyers who meet certain requirements. Applicants must have a minimum individual income of £35,000 or a combined income of at least £55,000. All applicants will still be subject to HSBC’s affordability checks to ensure the lending remains sustainable.
HSBC UK has also introduced higher LTI multiples for customers moving home or remortgaging. Those with incomes above £45,000 may now access LTI ratios between 5.0 and 5.5, depending on their loan-to-value and income levels.
The increased borrowing limit could enable buyers to purchase homes that better meet their needs, whether in terms of size, location, or proximity to schools and transport connections. The lender’s move comes as several other providers have made similar adjustments in response to recent changes from the Prudential Regulation Authority (PRA), which are designed to enable more high LTI lending across the market.
“There are significant challenges facing first-time buyers today, from finding a deposit that is likely to be tens of thousands of pounds, to rising property prices,” said Oli O’Donoghue (pictured right), head of mortgages at HSBC UK.
“By increasing our LTI multiple, we aim to provide extra support to those who are ready to take this important step. Affordability remains central to every lending decision, but extending our lending limits will provide extra firepower to those looking to get onto the property ladder,
“A higher LTI multiple allows us to consider a broader range of applicants, but every mortgage application will still be individually assessed to ensure the borrower can comfortably manage their repayments, even in a changing economic environment. We believe this new policy strikes the right balance between helping aspiring homeowners and protecting them from financial hardship.”
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