HSBC UK has unveiled a new maximum mortgage loan-to-income (LTI) ratio of up to 6.5 times annual salary for its Premier customers. To be eligible for HSBC Premier, customers must earn at least £100,000 per year paid into an HSBC Premier account, or maintain £100,000 or more in savings or investments with the lender.
The LTI adjustment means that a Premier customer with an annual salary of £75,000 could now borrow up to £488,000 under the revised policy, compared with up to £375,000 (5.0 times their income) under the previous rules, the bank confirmed. A Premier customer with an annual salary of £100,000 could now borrow up to £650,000, compared with up to £550,000 (5.5 times their income) under the previous arrangement. Premier account holders will also require a deposit of at least 10% to potentially access the 6.5 times income multiple.
Oli O’Donoghue, head of mortgages at HSBC UK, said: “This increase reflects both our confidence in the financial resilience of our Premier customer base and our commitment to responsible, sustainable lending.”
A number of lenders have implemented changes in recent months, allowing certain mortgage customers to borrow larger sums, following regulatory adjustments.
Simon Gammon, managing partner at Knight Frank Finance, said the enhanced income multiple demonstrates both a more assured regulatory climate “and HSBC’s clear appetite to grow market share”.
He said: “The real question is how much this will translate into demand, given the continued uncertainty around potential tax changes in the upcoming Budget.”
Nationwide Building Society revealed on Monday it is broadening its interest-only mortgage products, whilst extending the variety of repayment methods it will recognise beyond selling the primary home, to encompass UK-based savings accounts, investments, pension schemes and additional properties.
The building society’s interest-only range, accessible through brokers, will now be available to first-time buyers as well.
Carlo Pileggi, Nationwide’s head of mortgage products, said: “Interest only can be a great option for customers who have a suitable repayment vehicle and want the flexibility provided by lower monthly payments.”
Andrew Montlake, chief executive of Coreco mortgage brokers, said of Nationwide’s announcement: “Opening interest only to first-time buyers, while maintaining clear income thresholds of £75,000 sole or £100,000 joint, and keeping the proposition exclusively available via intermediaries, means customers will access the professional advice that is crucial, especially in the initial stages of their home-buying journey.”
