HSBC has made notable changes to its policy for residential mortgage lending, with the most considerable reforms designed to make it simpler for first-time buyers (FTBs) to climb the ladder. From Monday the 1st of September 2025, the lender has increased FTB loan-to-income (LTI) multiples and enhanced lending criteria across the board, including interest-only mortgages and non-FTB LTI limits.
What’s Changing for First-Time Buyers at HSBC
HSBC is now raising first-time buyer income multiples, allowing them to borrow more…provided they meet certain conditions. Notably:
- Single applicants will require a minimum of £35,000 of income.
- Joint applicants will require a minimum of £55,000 of joint income.
This is a significant development for FTBs aspiring to own their home, particularly as higher property prices have caused affordability to become one of the biggest challenges for FTBs.
Loan-to-Income Increases for Other Borrowers
It’s not just first-time buyers who benefit from HSBC’s latest moves. Non-FTB borrowers have benefited from the ceiling LTI raised from 4.75x income to 5.00x income for customers earning between £45,000 and £100,000, where the LTV is 85% or less. The move may enable many existing homeowners to take out more mortgages if they were to remortgage or move home.
Changes to HSBC’s Interest-Only Lending Policy
HSBC has also made various changes to its part & part and interest-only mortgages:
- Maximum term for part & part applications: Capital repayment facility stretched to 40 years (interest-only part still limited to 25 years).
- Maximum age: Capital repayment facility now to age 80.
- Interest-only assessment: Interest-only applications will now be assessed on a capital repayment basis, to help with affordability.
These changes offer borrowers greater flexibility in arranging their mortgage, particularly those approaching later life borrowing.
Insight from Oportfolio Mortgages Expert
Louis Mason, Head of Marketing and Communications at Oportfolio Mortgages, commented:
“HSBC’s move to increase first-time buyer loan-to-income multiples is actually a welcome lifeline for those struggling to find a place on the housing ladder. Affordability is one of the most significant barriers to new buyers, and so actions like this may be the difference between renting and owning. It’s also comforting to hear of wider enhancements to lending terms benefiting movers and remortgagers. Day in, day out, here at Oportfolio Mortgages we work with lenders like HSBC to enable customers to get the right deal for their situation.”
What This Means for UK Mortgage Borrowers
For first-time buyers, the changes can translate to the possibility of borrowing more and purchasing their dream home for which they have been making savings. For house owners, HSBC’s updated LTI and interest-only policy offer better opportunities for accessing competitive mortgage deals. If you are a remortgager, first-time buyer, or home mover, this is the moment to look at your options. Our specialists at Oportfolio Mortgages can assist guide you through HSBC’s new policy and find the perfect mortgage for you. Call our team today for a fee free initial mortgage chat with one of our experts.
Mortgage FAQs
Q: What is Loan-to-Income (LTI)?
Loan-to-Income is the multiple of your annual income that a lender will let you borrow. For example, if your income is £40,000 and the lender takes a 5x LTI, you can borrow £200,000.
Q: How do these HSBC adjustments help first-time buyers?
HSBC is raising higher LTIs for FTBs meeting the minimum income threshold. This could increase the amount they can borrow so it’s easier to purchase their first home.
Q: Do existing homeowners with property qualify for HSBC’s new policy?
Yes. HSBC has increased LTI multiples for non-FTBs too and revised interest-only mortgage lending policies to be more flexible.
Q: Is interest-only mortgage risky?
Interest-only mortgages can be suitable for some borrowers but require a solid repayment strategy. HSBC’s reforms are more flexible, but lenders will cautiously scrutinize affordability.
Q: Am I qualified for HSBC’s mortgage reforms?
It depends on your income, whether you’re a first-time buyer or not, and the type of mortgage you’re applying for. A mortgage broker like Oportfolio Mortgages can assess your situation and advise on the best options.
