Lender lowers minimum income threshold following PRA rule change
Skipton Building Society has reduced its minimum income requirement for borrowers seeking higher loan-to-income (LTI) mortgages, following recent changes from the Prudential Regulation Authority (PRA) aimed at enabling more high LTI lending.
The mutual now allows applicants with a minimum income of £40,000 — down from the previous £50,000 threshold — to access LTI ratios above 4.49 times income. This adjustment places Skipton among the lenders with the lowest minimum income requirements for such products in the market.
Under the revised criteria, borrowers earning at least £40,000 can access up to 5.5 times their income for loans up to 90% loan-to-value (LTV), and up to five times income for loans above 90% LTV, subject to affordability checks. For example, a borrower with a total income of £41,000 and a 10% deposit could previously borrow up to £184,090. With the new rules, the same applicant could now borrow up to £225,500 — a 22% increase.
Skipton has also raised the maximum LTI ratio on its 100% Track Record Mortgage from 4.75 to five times income. This means a household earning £60,000 and applying for the 100% Track Record Mortgage without a deposit could now borrow up to £300,000, compared to the previous cap of £285,000.
“We’ve campaigned for change to the loan-to-income rules to better support first-time buyers, so it’s really positive to see the PRA respond, and we’re proud to be taking immediate action following that shift,” said Charlotte Harrison, chief executive officer of home financing at Skipton Building Society.
“The changes we’ve announced today are a practical step that will make a real difference, by helping even more people take that first step onto the property ladder while ensuring we continue to lend responsibly. The PRA has estimated LTI changes could support an additional 36,000 first-time buyers into homeownership each year. We look forward to working closely with regulators and industry partners to build on this progress.”
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