Virgin Money has announced the removal of its interest only LTI cap, marking a major change in its lending terms.
The change means that the repayment method will no longer influence the loan-to-income (LTI) ratios, enabling more customers to access the necessary loan amounts.
This policy revision follows a series of changes made in 2023, all aimed at improving customer affordability outcomes.
Under the new loan-to-income policy, Virgin Money has set differentiated LTI ratios based on income levels for purchases or remortgages with additional borrowing.
Customers with an income under £50,000 can borrow up to 4.49 times their income. Those earning between £50,000 and £74,999 are eligible for up to 5 times their income, and for incomes of £75,000 or more, the ratio increases to 5.5 times.
However, a cap of 4.49 times the LTI applies in certain conditions, such as when the loan-to-value (LTV) ratio is over 85%, if any applicant is self-employed (excluding specific contractors), or for shared ownership mortgages.
For remortgages without additional borrowing, the terms are also favorable. Up to an 85% LTV, customers can avail themselves of an LTI of up to 5.5 times.
Beyond an 85% LTV, the LTI ratio is limited to 4.49 times. Notably, in these remortgage cases, a customer’s income and self-employment status will not affect the LTI limits.
