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Santander lowers LTI cap for borrowing over 80% LTV

  • 08/01/2016
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Santander lowers LTI cap for borrowing over 80% LTV
Santander has reduced its loan-to-income (LTI) cap for residential customers looking to borrow at more than 80% loan-to-value (LTV), from five times gross income to 4.45 times.

The lender said the move, which came into effect on 7 January, would allow customers access to an affordable level of borrowing, while protecting them from borrowing beyond their limits.

There are no changes to the LTI cap for first-time buyers which is already set at 4.45 times following amendments to the bank’s risk criteria last year.

A spokesman for the bank said: “As a responsible lender, we have reviewed the maximum income multiples (also known as loan-to-income ratio) for customers seeking to borrow between 80 and 90% of the value of their property. This change reflects our continued, prudent approach to lending and affordability and is in line with current market conditions.

“We remain committed to lending and have a range of products, with strong rates, which support everyone looking to secure a mortgage.”

Banks have moved to limit income multiples on lending after the Bank of England published new rules to constrain new lending at LTI ratios at or above 4.5 to no more than 15% of the total number of new mortgage loans at a firm.

Last year both TSB and Barclays announced that an LTI cap of 4.5 times income would be imposed across all mortgage products.

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