Major lender revises policies for self-employed, interest-only, and BTL applicants
Barclays has revised its mortgage lending criteria, introducing a series of changes aimed at expanding borrowing options for a range of applicants.
For self-employed borrowers, the bank will now factor in the full amount of net profits when assessing affordability. In addition, the minimum loan amount required for this assessment has been lowered. These adjustments are expected to enable self-employed individuals to access higher borrowing limits and a wider selection of properties.
In the interest-only segment, applicants with at least £500,000 in equity may now be eligible for a loan-to-value (LTV) ratio of up to 75%, provided the repayment strategy is the sale of the property.
The high street lender has also increased the maximum loan size for buy-to-let mortgages. For new build properties, the ceiling has risen from £500,000 to £550,000 at 60 to 75% LTV. For flats, the maximum has also increased to £550,000 at 70 to 75% LTV.
“These enhancements are the latest in a series of changes Barclays has made to improve affordability for homebuyers,” said a spokesperson at Barclays. “Earlier this year, Barclays announced changes to its affordability calculations that allowed a family to potentially borrow up to £30,750 more.
“It also increased its maximum loan amounts for high LTV purchases across all of its mortgages, to £640,000 for houses and £310,000 for flats, enabling more buyers to access homes in higher price brackets with just a 10% deposit.
“It has also introduced several new propositions supporting home ownership, including Mortgage Boost – which allows family or friends to ‘boost’ the amount that can be borrowed towards a home without having to lend or gift money directly – and a zero deposit mortgage for Right to Buy applicants.”
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