First-Time Buyers Can Borrow Up to 7 Times Income for Mortgages
Updated
Updated · bbc.co.uk · Aug 2
First-Time Buyers Can Borrow Up to 7 Times Income for Mortgages
3 articles · Updated · bbc.co.uk · Aug 2
Summary
UK lenders are now offering some first-time buyers mortgages worth six to seven times annual income, widening access as average house prices near £300,000.
The shift follows a relaxation of rules that had effectively capped most high loan-to-income lending, with only 15% of new mortgages previously allowed above 4.5 times income.
Larger loans still come with tight conditions: strong credit, stable salaried income, sufficient deposit savings and often a commitment to fixed rates for five or 10 years.
Brokers say the bigger multiples could help renters and those living with parents buy sooner, but they also raise risks if rates, lender standards or personal finances worsen by remortgage time.
The change marks a notable loosening from the post-2008 crackdown on mortgage risk, after years in which house prices outpaced wage growth.