Only yesterday we reported on NatWest increasing their maximum loan to income affordability and now, as if by magic, another lender follows in suit! Intermediary exclusive lender Accord mortgages have announced that they will be pushing their maximum mortgage affordability up to 5.5X income from the usual 4.5X income.
Of course, this does not mean that every person who gets a mortgage from Accord will be able to borrow 5.5X their annual income as a mortgage. The usual mortgage affordability rules apply i.e. credit commitments, dependents, deposit size etc. will all be factored in to the affordability still. However, the lender has announced that for higher earning individuals, they will be potentially able to lend a lot more than their standard criteria.
What Have Accord Said About The Increase To Their Maximum Mortgage Affordability?
Specifically commenting on the new maximum mortgage affordability, Accord has said in a statement to mortgage intermediaries and brokers: ‘Common-sense lending – it’s in our DNA! So, we’re very excited to bring you another great product range to help you help even more of your clients – Boost LTI (Loan to income) – which is available from today! Our Boost LTI range will offer increased LTI options (from 5x up to 5.5x income) for eligible clients with household earnings of £70,000 or above who need a small stretch to their income multiples to achieve their borrowing goals. With LTVs (Loan to values) of up to 90% (85% for new builds), our new Boost LTI range has been designed to help many clients including first-time buyers, those looking to move up the property ladder and for remortgages too.’
Nicola Alvarez, senior manager for new propositions at Accord also commented: “Building on our commitment to common-sense lending, we’re really pleased to be adding Boost LTI to our product range to support brokers to help more clients. We’ve designed this range to help many borrowers – including first-time buyers, those looking to take their next step, remortgages and those purchasing new-build properties. Ultimately, we’re giving brokers additional choice for those clients that need a little more flex. Those previously limited by LTI or requiring a higher loan amount may benefit from this launch, and we’re sure it’s wide appeal, thanks to the combination of higher LTVs and lower minimum incomes, will be welcomed.”
What Do The Mortgage Experts Say?
As previously mentioned, we recently reported on NatWest upping their maximum loan to income only the other day. As a brokerage who has a very diverse range of clients, these new changes will affect all of our clients differently and we see this move as overall very positive. Nicola Alvarez makes mention of this criteria change helping first time buyers and we completely agree.
For a couple purchasing their first home, they need to earn at least £70,000 between them to be able to potentially get a loan of up to 5.5X income. That’s £35,000 each or £40,000 and £30,000 and so on. Yes, there are a lot of people looking to purchase their first house who earn less than £70,000. We understand this and we have plenty of options for our clients who earn less. However, for thousands of people or couples looking to purchase their first home and earning a good living in a good career, the dream of home ownership may just be that little step closer.
If you or anyone else you know is struggling with their mortgage affordability and just needs that little bit extra from a mortgage, give our team a call today to see how we can potentially help.