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First-time buyers may borrow up to 7 times income under relaxed rules
A BBC Business explainer says lenders can now stretch first-mortgage borrowing to about six or at most seven times annual earnings, replacing tighter limits tied to loan-to-income risk.
BBC Business reports that recent changes to mortgage regulation and lending practices could make it easier for some first-time buyers to get a mortgage by allowing them to borrow more relative to their income.
The article says first-time buyers can now borrow up to six times what they earn in a year, and in some cases up to seven times, even as the cost of living, average house prices near £300,000, and rising interest rates have made deposits harder to save.
It notes that the relaxation follows a period when rules technically limited how much lenders could offer on higher-risk loan-to-income terms, with only 15.0% of new mortgages allowed to exceed a 4.5 times threshold. The BBC Business piece adds that lenders have increasingly offered larger loans compared with income, particularly among niche lenders and building societies.
The explainer cautions that bigger borrowing is not for everyone, with stricter criteria still expected for those seeking a larger mortgage, and it flags that lenders may tighten again if the economic outlook worsens.