The lender is reducing residential stress rates for shorter-term products.
Customers taking a mortgage with a product term under five years will now benefit from a lower stress rate, meaning shorter terms will no longer negatively affect borrowing potential.
It is also lowering the income threshold for higher loan-to-income (LTI) borrowing. The minimum income required to access 5.5 times income has been halved from £100,000 to £50,000, opening up greater borrowing potential to a wider group of customers.
The lender will also increase its maximum income multiple for higher loan-to-value lending. For customers with a loan-to-value (LTV) between 90.01% and 95%, the maximum income multiple has been increased from 4.75 to 5, provided the household income exceeds £50,000.
Charlotte Harrison, CEO of Homes at Skipton said: “At Skipton, we continue to recognise the growing affordability challenges facing first-time buyers.
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“Adjusting stress rates alone isn’t always enough, as many would-be buyers are still impacted by the limitations the Loan to Income (LTI) cap place on our lending. That’s why we’re taking a more comprehensive approach by revising both, while remaining within the current cap.
“And as a result of the changes we’ve made, loan sizes could increase by up to £45,000 (+16%) for a typical household earning £60k.”
