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Maximum income multiples reduced to 4.49 by Barclays

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Written by: Owain Thomas
04/09/2020
The lender has cut its loan-to-income caps for all applications amid the tightening of lender criteria across the mortgage market
Maximum income multiples reduced to 4.49 by Barclays

Barclays has cut its loan to income (LTI) for all residential cases that have not yet gone to offer to a maximum of 4.49 times income.

The LTI is the maximum mutiple of the applicant’s income that the lender is prepared to offer.

For borrowers with a loan to value (LTV) above 90 per cent and joint income of £50,000 or less, the new LTI will be even tighter, at four times income.

This limit will also apply to applications where there is a debt to income ratio of 20 per cent or more.

In a message sent to mortgage brokers, the lender said the LTI cut would also affect cases that have already gone to offer, where a material change has occurred that was reported after 28 August.

Barclays listed seven examples which it considered to be a material change in circumstances:

  • An increase to the mortgage term
  • An increased loan amount
  • A change that results in increased outgoings/expenditure, for example adding a commitment or financial dependant
  • A reduction to the stated income
  • An increase to LTV
  • A change of repayment type
  • A change of borrower.

A Barclays spokesperson said: “We regularly review our lending policies and today have made some changes to loan-to-income multiples.”

In the note to advisers the lender said: “These changes also apply to any application that has been created and not submitted and to those that have been submitted but are yet to receive an offer.”

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