Before their recent shift from a hard to a soft credit footprint before the submission of mortgage applications, Barclays is introducing two significant enhancements to their loan-to-income (LTI) policy. These changes, set to take effect from Thursday the 26th of October 2023, are designed to empower more clients seeking a mortgage with Barclays. Specifically those with higher earned income. Jointly or for sole applications. The new policies will be automatically applied to all residential lending decisions, helping potential homeowners achieve their dreams.
Expanded Loan-to-Income Ratios
Starting on October 26th 2023, Barclays is raising the LTI ratios for two specific income brackets, potentially making it easier for eligible customers to secure a mortgage. These changes, which are based on income, aim to provide greater flexibility and affordability for a broader range of applicants.
Joint Customers with £75k-£100k Joint Income
For joint applicants with a combined income falling within the £75,000 to £100,000 range and a loan-to-value (LTV) ratio of less than 85%, Barclays will increase the LTI from 5.00x to 5.50x. This enhancement will offer significant financial relief, allowing customers to borrow more and potentially purchase a more suitable home.
Customers with £45k-£60k Joint Income
Customers with a joint income in the range of £45,000 to £60,000 will also benefit from these changes. If their LTV is less than 85%, they will see their LTI increase from 4.49x to 5.00x. This adjustment will open new doors for customers in this income bracket, as they can now borrow more to achieve their homeownership goals.
These improvements reflect Barclays’ commitment to supporting a diverse group of homebuyers, ensuring that mortgages remain accessible to a broader range of customers. By increasing the LTI ratios for the specified income brackets, Barclays is helping to address the ongoing housing affordability challenges facing many individuals and families. For joint customers with higher incomes, the ability to borrow at a higher LTI ratio can make a significant difference in their housing choices. The increase from 5.00x to 5.50x for those earning between £75,000 and £100,000 jointly allows them to consider more options in the housing market.
Likewise, customers with incomes ranging from £45,000 to £60,000 who may have previously found it challenging to secure a mortgage now have a more attainable path to homeownership. With their LTI increasing to 5.00x from 4.49x, they can afford more suitable homes without straining their finances.
Barclays’ Commitment to Mortgage Accessibility
Barclays’ decision to improve their LTI multiples comes as part of their broader commitment to making homeownership accessible to a more extensive customer base. By offering more favourable LTI ratios, Barclays is helping individuals and families achieve their homeownership dreams and ensuring that mortgages align with their financial capabilities.
The transition from a hard credit footprint to a soft one for mortgage applications, combined with these LTI enhancements, demonstrates Barclays’ dedication to providing flexible and innovative solutions to potential homeowners. These changes are particularly significant in the current housing market, where rising property prices have made it challenging for many to step onto the property ladder.
The Future of Mortgage Lending
Barclays’ announcement regarding the expansion of their LTI ratios signifies a positive development in the UK mortgage industry. It acknowledges the changing landscape of homebuyers and aims to accommodate their evolving needs and financial capabilities. While these changes are undoubtedly a welcome development for many, it is essential to remember that responsible borrowing is still so important. Prospective homeowners should carefully consider their financial situation and consult with mortgage experts like ourselves at Oportfolio, to determine the best mortgage product for their needs.
Speak To a Mortgage Broker
In summary, Barclays’ recent adjustments to their loan-to-income multiples are a testament to their ongoing commitment to helping people fulfil their homeownership dreams. These changes open up new opportunities for a wider range of applicants, making homeownership more attainable and inclusive. However, a borrower should never go it alone. It is very important that you always book in a consultation with a mortgage professional before making any decisions. Call or email our team at Oportfolio today to see how we can help you.