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First-time buyers may borrow up to 7 times income for mortgages
Under relaxed UK mortgage lending rules, borrowers can now qualify for larger loans, with lenders shifting to higher loan-to-income limits.
BBC Business reports that rule changes and more flexible lending have made it easier for some first-time buyers to access mortgages, even as costs of living remain high, average house prices sit near £300,000, and interest rates on new mortgages have been rising.
The outlet says the latest shift allows first-time buyers to borrow up to six times what they earn in a year, and in some cases up to seven times, expanding access compared with earlier lending constraints that capped the share of higher loan-to-income deals at 15% above 4.5 times.
BBC Business notes the adjustment comes with risk, pointing to the role of reckless mortgage lending in the 2008 financial crisis, when banks faced losses and some borrowers lost their homes.
According to the report, mortgage broker L&C’s David Hollingworth said the greater flexibility could change borrowing capacity relatively quickly for first-time buyers, while broker Trinity Financial’s Aaron Strutt said the temptation is often driven by the prospect of moving out of renting or living with parents. The article also emphasizes that lenders still apply strict first-time buyer criteria and may tighten borrowing terms if the economic outlook worsens.