A prominent lender has recently unveiled an enhancement to its loan-to-income (LTI) multiples, significantly increasing the borrowing potential for higher-earning individuals to 5.5 times their salary. This new offering aims to make home ownership more accessible and flexible for a wider range of borrowers.
Key Highlights:
- Single or joint borrowers earning over £40,000 and borrowing between up to 90% loan-to-value (LTV) can benefit from an LTI of up to 5x.
- For those with a sole income exceeding £75,000 or a joint income exceeding £100,000, and borrowing up t 90% LTV, an LTI of up to 5.5x is available.
Flexibility Beyond First-Time Buyers:
Unlike many high LTI offerings that cater primarily to first-time buyers, this scheme is open to all eligible borrowers. Another advantage is the availability of a 2-year fixed rate option, providing greater flexibility compared to the traditional 5-year fixed rate. This means borrowers can secure attractive rates without committing to long-term fixed rates, offering more room for financial manoeuvring.
Inclusive Borrowing Options:
The lender also extends its inclusivity by accepting foreign currency and seafarer applicants alongside standard UK resident applicants. Unlike some lenders, such as Santander, who impose a 25% haircut on Euro and Dollar income, this lender accepts foreign currency income without any deductions. Consequently, this means borrowers can potentially access significantly higher loan amounts.
Here is a list of currencies the lender will accept without deductions
| British Pound Sterling | New Zealand Dollar |
| Euro | Norwegian Krone |
| Australian Dollar | Polish Zloty |
| Bulgarian Lev | Romanian Leu |
| Canadian Dollar | Singapore Dollar |
| Czech Koruna | Swedish Krona |
| Danish Krone | Swiss Franc |
| Hungarian Forint | United States Dollar |
| Japanese Yen |
Comparison with Other Lenders
Most lenders cap affordability at 4.49 times the income once borrowing exceeds 85% loan-to-value (LTV). This new enhancement introduces a significant variation in borrowing potential across the market.
For instance, a couple with a combined income of £100,000 would typically be able to borrow £449,000 with mainstream lenders like HSBC, Barclays, or Santander. However, with this new offering, they can now borrow up to £550,000. This increase provides greater flexibility and enhances their purchasing power.
In summary, this initiative allows higher-earning individuals to borrow larger amounts, making home ownership more accessible and offering flexible, inclusive mortgage solutions in today’s dynamic market.
In summary, this new initiative allows more individuals to borrow higher amounts, making home ownership more accessible for higher-earning individuals, and providing flexible and inclusive mortgage solutions in today’s dynamic market.