Skipton Building Society has lowered its minimum income threshold for first-time buyers (FTBs) looking for higher loan-to-income (LTI) mortgages.
From 28th July, households with incomes from £40,000, down from £50,000, can now apply for LTI above 4.49-times.
The change followed calls from Skipton and other building societies for the LTI flow limit to be increased.
Borrowers with incomes of £40,000 or more can now access up to 5.5-times LTI up to 90% LTV, and 5-times LTI for over 90% LTV, on Skipton’s full product range, subject to affordability checks.
With these changes, an applicant with a total income of £41,000 and a 10% deposit could now borrow up to £225,500, compared to £184,090 under previous criteria.
This is a 22% increase, or £41,000 more.
Additionally, Skipton has raised the maximum LTI on its 100% Track Record mortgage from 4.75x to 5x income.
Borrowers with a household income of £60,000 can now borrow up to £300,000, up from £285,000.
Skipton said all higher LTI lending will remain subject to strict affordability and stress testing.
Charlotte Harrison, CEO of home financing at Skipton Building Society, said: “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.
“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.”
Harrison added: “We look forward to working closely with regulators and industry partners to build on this progress.”
