Residential  

Accord lowers LTI for higher incomes

Accord lowers LTI for higher incomes
 Credit: via Dreamstime

Accord Mortgages is lowering its loan-to-income (LTI) cap for higher household incomes.

For incomes of £60,000 and above, the lender is lowering the LTI cap from five times the income to 4.49 times as of today (October 21).

Affordability is already calculated at a maximum of 4.49 times for incomes less than £60,000.

The lender said it was standardising the LTI caps to maintain service levels and enable it to retain the broadest range of products possible.

The temporary changes will affect new business and new applications for additional loans. Pipeline cases will not be affected, even if there is a material change to the application.

Jeremy Duncombe, director of intermediary distribution at Accord Mortgages, said: “Our priority is ensuring we can continue to offer a high level of support to brokers within the current environment. By making this adjustment to LTIs, we can manage volume and increase capacity to support brokers with a wider range of products.

“Whilst a difficult decision to make, by honouring all our pipeline cases we hope the impact to brokers and customers will be limited. We will continue to review the situation and reinstate the higher cap as soon as possible.”

Luke Spellman, mortgage broker and owner of Spellman Financial Services, commented: “Brokers will appreciate that Accord will honour pipeline cases and have given some warning. 

“But this will now limit the options to consumers further which are looking to maximise borrowing, in particular higher earners.”

The lender’s parent company, Yorkshire Building Society, is also standardising its lending policy to an LTI cap of 4.49 times for all incomes.

chloe.cheung@ft.com

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