Yorkshire Building Society is set to enhance its mortgage range in response to the regulator’s decision to relax limits on higher loan-to-income (LTI) lending.
The move follows last week’s announcement that the 15% cap on lending above 4.49 times income is under review, giving lenders the freedom to set their own responsible thresholds.
The Society, which has long advocated for this change, will implement product changes through its intermediary-only arm, Accord Mortgages.
From 16th July, its ‘Boost LTI’ product will be available to first-time buyers borrowing at 95% loan-to-value, and the minimum income requirement will be lowered from £75,000 to £50,000.
The Society will also cut the minimum income threshold for lending up to five times income to £50,000.
Ben Merritt, director of mortgages for Yorkshire Building Society, said: “Last week’s announcement by the regulators was exactly what we have been campaigning for, to loosen the shackles and enable us to support even more borrowers – and particularly first-time buyers, in being able to buy homes.
“The simple fact is that there are customers, including first-time buyers, who can afford to borrow more than 4.5 times their income, who have been shut out of this market by the existing regime.
“We can now offer them a lifeline to borrow what they need for their dream home in line with our commitment to responsible lending.
“This is crucial in the current economic environment where house prices in many parts of the UK continue to rise at a faster rate than incomes.”
Additional enhancements are expected later this month and will be rolled out to direct customers.
Merritt added: “We have been preparing new offerings in anticipation, which will cater for the significant proportion of borrowers out there who are very creditworthy but, under previous rules, struggled to borrow enough to cover the cost of their desired homes.
“While we are still awaiting clarity on exactly what the new higher-LTI lending limit will be following the review, we will continue to campaign and work with regulators to ensure our borrowers’ needs are represented, while in the meantime doing everything we can to enhance their access to suitable solutions.”
Earlier innovations have included the £5k Deposit mortgage, allowing purchases up to £500,000 with a £5,000 deposit, and a lower interest rate stress test which has increased borrowing power by an average of 15%, or £37,000.
