Affordability changes

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On Thursday 21st October we will be changing some of the loan to income (LTI) limits applied within our affordability calculation. We will also be increasing the percentage of Additional Duty Hours (ADH) and Nursing Bank income used in our affordability calculation.

The maximum LTIs are being increased for many applications where the income is over £75,000 and loan amount up to £1m, with the LTI increased to up to 5.50x

A full list of the LTI changes is below:

  • The <£30,000 income tier which is subject to a 4.49x max LTI is being increased to incomes <£40,000
  • Where income is >£75,000 and LTV<=75%, for loans up to £1m, the max LTI is being increased from 5.00x to 5.50x
  • Where income is >£75,000 and LTV 75.01% to 85%, for loans >£750,000 to £1m, the max LTI is being increased from 4.00x to 4.49x
  • Where income is >£75,000 and LTV 85.01% to 95%, for loans >£500,000 to £750,000, the max LTI is being increased from 4.00x to 4.49x.
Income
LTV
Loans <=£750K
Loans >£750K - £1m
Loans >£1m
<£40K
0-95%
4.49x
N/A
£40K-£50K
0-85%
85.01-95%
4.75x
4.49x
£50K-£75K
0-75%
75.01-85%
85.01-95%
5.00x
4.75x
4.49x
>£75K
0-75%
75.01-85%
85.01-95%
5.50x
5.00x
4.49x
5.50x
4.49x
N/A
5.00x
4.00x
N/A

The level of credit score achieved and overall credit profile may restrict the LTI applied. A maximum LTI of 4.49x applies on Affordable Housing schemes and where there is any element of self-employed income.

The table showing all LTIs on our website Criteria page under 'Affordability & Sustainability' will be updated on Thursday 21st October.

The percentage of ADH and Nursing Bank income used in our affordability calculation is being increased from 60% to 100%. ADH should continue to be keyed under the option in 'other income' and Nursing Bank income should be keyed as main income or other income as appropriate. When either income is keyed as 'other income' we will now automatically use 100% of this income.

The changes apply to applications started from Thursday 21st October. A Decision in Principle (DIP) keyed on Thursday 21st October will be subject to these new rules. Applications started before Thursday 21st October, even if at DIP stage, will remain on the previous rules even if a full application is submitted after Thursday 21st October.

Our website affordability calculator will be updated on Thursday 21 October.

Our tracker rate mortgages are linked to Bank of England bank rate (also known as Bank of England repo rate). Details of this rate can be found on the Bank of England website at www.bankofengland.co.uk.

For independent information on mortgages, visit the website 'Money Advice Service'.

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