The changes will initially be introduced through its intermediary-only lending arm, Accord Mortgages.
The mutual will extend its Boost LTI product – which offers access to mortgages up to 5.5 times income – to first-time buyers borrowing up to 95% LTV, and the minimum income threshold will be lowered from £75,000 to £50,000.
Yorkshire Building Society will also reduce the minimum income threshold for lending up to five times income from £75,000 to £50,000.
The mutual said “further planned enhancements” for direct customers are scheduled and will be made available before the end of this month.
It comes off the back of Accord Mortgages lowering its stress rate and the firm confirming it has helped over 800 first-time buyers with its £5k Deposit Mortgage product.
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Ben Merritt, director of mortgages for Yorkshire Building Society, said: “Last week’s announcement by the regulators was exactly what we have been campaigning for, to loosen the shackles and enable us to support even more borrowers – and particularly first-time buyers, in being able to buy homes.
“The simple fact is that there are customers, including first-time buyers, who can afford to borrow more than 4.5x their income, who have been shut out of this market by the existing regime. We can now offer them a lifeline to borrow what they need for their dream home in line with our commitment to responsible lending.
“This is crucial in the current economic environment where house prices in many parts of the UK continue to rise at a faster rate than incomes.”
Merritt added: “We have been preparing new offerings in anticipation, which will cater for the significant proportion of borrowers out there who are very creditworthy but, under previous rules, struggled to borrow enough to cover the cost of their desired homes.
“While we are still awaiting clarity on exactly what the new higher-LTI lending limit will be following the review, we will continue to campaign and work with regulators to ensure our borrowers’ needs are represented, while in the meantime doing everything we can to enhance their access to suitable solutions.”
The change comes after the Prudential Regulatory Authority (PRA) and Financial Conduct Authority (FCA) said they would allow lenders to seek permission to breach the 15% high-LTI limit.
Following the announcement, Nationwide said it would be looking for permission to breach the cap, adding that this would allow it to help around 10,000 more first-time buyers per year.
Earlier today, Nationwide relaxed the criteria for its Helping Hand mortgage product, which offers lending up to six times income to first-time buyers, with the minimum income required being cut.
