Mortgage News
Barclays changes mortgage lending cap criteria
Barclays Mortgages has reduced the threshold at which the 5.00 x income multiple cap applies to £175,000 from £200,000 previously for mortgage applicants.
The changes are effective from today, Friday 21st August 2015.
Just over a year ago, in July 2014, Governor of the Bank of England Mark Carney announced two new mortgage lending rules to calm the runaway housing market.
Firstly, borrowers stretching themselves to a loan-to-income ratios of over 4.5% would be capped to under 15% of annual lending. Secondly, these deals had to undergo affordability tests to check borrowers could stand a 3% rate rise on deals.
Since then, several lenders have gradually loosened their lending restrictions after the initial rush to comply, including Barclays, which has already reduced its 5 x income tier to applicants for loans above £300,000 in March, then again to £200,000 in June.
Craig Calder, director of mortgage products at Barclays, said: “We’re making these changes because we want to extend the opportunity for more people to become homeowners. We understand that first-time buyers in particular have a unique set of challenges and know that this will widen opportunities for them to get onto the property ladder – as we continue to lend in a responsible way.”
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All other income multiple limits are unchanged.