In a broker statement, Natwest said from Tuesday 13 October, the LTI maximum on mortgages of 75% LTV or lower would be cut from 4.99 to 4.45, while mortgages of between 75.01% and 85% LTV will see the LTI cap restricted to 4.49 times.
No changes will be made to Natwest mortgages above 85.01%, with the adjustments being implemented across the bank’s retail businesses at the same time.
In June last year, the Bank of England’s Financial Policy Committee announced that it planned to place loan-to-income restrictions on mortgage lenders, recommending that loans worth more than 4.5 times income should occupy less than 15% of a firm’s income. Following the changes which were implemented in October, a number of lenders moved to cap residential LTI multiples over higher LTVs.
Natwest said that the loan to income change would be incorporated into its affordability calculator and applied automatically.
A spokesperson for NatWest Intermediary Solutions said: “We continue to place a strong focus on customer affordability. The loan to income maximum is just one measure we use to assess affordability and the changes have been incorporated into our affordability calculator that is automatically applied to the result a broker will get on screen. For all loans above 85% LTV the loan to income maximums remain at four times income.”
All applications submitted by close of business today will be assessed on the current LTI maximums with all new business submitted from tomorrow assessed under the new criteria.