Leeds has raised its loan-to-income (LTI) ratio to 4.75 for borrowers wanting to move home or remortgage following regulatory changes.
The building society is offering the new criteria on mortgages up to 85 per cent loan to value (LTV) after the Bank of England gave lenders more flexibility to cope with fluctuations in business volumes.
Leeds’ previous LTI ratio was 4.5.
The regulatory changes mean lenders will be permitted to monitor and report their LTI ratios quarterly on a rolling 12-month basis, rather than by individual quarter.
Martese Carton, Leeds Building Society’s head of intermediary distribution, described the changes as “good news for borrowers and brokers”
“As a responsible lender, we will continue to assess all mortgage applications on affordability,” she added.
“This prudent approach is supported by our decision to lend at higher LTI, with an LTV limit of 85 per cent, to borrowers who already have a mortgage and can demonstrate previous payment history.”
Michelle Lawson, director at Fareham-based Lawson Financial, commented: “It’s always good to see a lender reactive to a changing market and if a client is currently paying a mortgage and is clearly affording it and will be better off by changing products, it is silly that obstructions are put in the way. Common sense lending is what we really need in the industry.”
simon.allin@ft.com
