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Barclays loosens loan-to-income criteria
Barclays has made changes to its loan-to-income criteria by lowering the minimum loan amount which qualifies for the enhanced multiple of 5 times income, from £300,000 to £200,001.
The changes to Barclays’ income multiple lending policy will take place with immediate effect. Loans of £200,000 or less will be subject to the 4.49 times income multiple cap.
Last year, the Bank of England’s Financial Policy Committee announced plans to be implemented from October 2014 to restrict loan-to-income ratios, recommending that loans worth more than 4.5 times income should occupy less than 15% of a firm’s new mortgage lending.
Help to Buy loans were also amended by the Treasury so that no Help to Buy loan with an LTI ratio exceeding 4.5 can be accepted.
Following the announcement Barclays made changes to its residential mortgage applications by capping loans over 80% LTI at 4.5 times income.
The most recent changes at the lender follow a regular review of its lending criteria, according to a spokesperson.
The spokesperson said: “This change builds on our recent expansion of our affordability criteria and interest only offerings to help more customers – whether they are buying a home or remortgaging from another lender”.
