Borrowers may access higher income multiples under new policy
Tipton & Coseley Building Society has revised its standard loan-to-income (LTI) policy, now allowing borrowers to access loans up to five times their income across its full mortgage range.
The updated policy applies to products with loan-to-value (LTV) ratios of up to 95%, and there is no minimum income threshold for applicants.
Tipton & Coseley has also changed its approach to affordability assessments. Under the new process, stress tests will be based on the specific mortgage product selected by the customer, rather than a standardised rate. According to the mutual, this adjustment is expected to make affordability calculations less restrictive for many borrowers.
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.
“These important changes will deliver a more tailored approach to affordability assessments, with full consideration of each borrower’s individual circumstances,” said Andy Millard (pictured right), head of intermediary distribution at Tipton & Coseley Building Society.
“It creates scope for us to increase the support we offer to brokers and applicants, while still lending responsibly.”
The society estimates that, under the revised affordability criteria, a typical household with no other debts could be eligible for approximately £19,000 more in borrowing.
“Our purpose is to help our customers achieve their most important financial goals and often that includes securing a home of their own,” Millard said.
“Whether it’s a first-time buyer, or someone needing a lending solution later in life, we want to remove any unnecessary barriers and help even more customers with their home ownership plans. In addition, we’ll always listen to what brokers tell us they need from a provider and develop our proposition accordingly.”
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