NatWest has announced a significant overhaul of its mortgage criteria, targeting higher earners with a new offer that allows some borrowers to secure loans worth up to 6.5 times their income. This means a couple with a combined annual income of £150,000 could potentially borrow as much as £975,000, a substantial increase from the £750,000 available under the standard 5x income multiple.
Changes to Lending Criteria
The bank has raised its maximum loan-to-income (LTI) ratio for joint applicants earning above £150,000. The development marks the fourth time this year that NatWest has eased lending requirements as major banks compete fiercely for affluent borrowers amid signs of a housing market recovery. Mortgage specialists note that lenders are progressively expanding affordability criteria to revitalise housing activity following years of elevated borrowing costs and stagnant transactions.
Industry Reactions
Sarah Fox-Clinch, director at Fox Davidson, commented: "High street lenders are now competing hard in the large loan arena, and NatWest moving its joint LTI to 6.5x at 75% LTV is another positive step. High earners are good quality, low LTV borrowers, and lifting the income multiples is the simplest way for a lender to grow its book. Updates like this are music to my ears."
Riz Malik, an independent financial adviser at R3 Wealth, said banks were "trying to pull out all the stops to get Britain moving." However, he cautioned that stamp duty changes remained a far greater hurdle for the broader market. "Is it enough to get Britain moving? Not with the stamp duty noose around the neck of the UK property market," he added.
Limitations and Concerns
Others warned that the new regulations would only benefit a relatively small pool of wealthy borrowers, particularly in London and the South East where house prices remain exceptionally high. Hannah Vandervennin, director at The Mortgage Consultancy, told Newspage that the requirement for a 25% deposit would still prevent many buyers from taking advantage of the higher borrowing limits. "Pushing income multiples upward without loosening the LTV ceiling is moving one lever while the other stays bolted down," she said.
Gaurav Shukla, chief executive at Home Me Mortgages, said the changes would assist some professionals struggling with affordability despite commanding high salaries. But he added: "Affordability is still driven by rates, confidence and whether monthly payments feel comfortable, not just maximum borrowing power."
Stephen Perkins, managing director at Yellow Brick Mortgages, said the impact would most likely be felt predominantly amongst high earners in the capital. "This will not have any seismic impact beyond high earners in London," he noted.
Ranald Mitchell, director at Charwin Mortgages, described the change as "exactly the kind of modern lending criteria the market needs. Britain's housing market has changed, incomes have changed and property prices have changed, so lenders have to evolve, too."
