The mutual said it was launching a dedicated mortgage product to support those people who found that although they had adequate income to comfortably afford the monthly payments, they failed the affordability test at 4.5 times income.
“As house prices have increased we’ve come across more and more instances where the income multiple restricts people who are well able to afford the monthly payments,” the lender said.
It is basing the change on feedback received from brokers and borrowers and added that there was the potential to add similar products in the future if it was successful.
The minimum income will need to be £50,000 for sole applicants and £75,000 for joint and there is no restriction on profession.
Suitable borrowers will be able to take advantage of a 2.45 per cent discounted rate for two years with £999 completion fee, up to a maximum 85 per cent loan to value (LTV) and a maximum loan of £750,000.
The mutual confirmed the only restrictions were for self-build, buy for university and in-retirement where it has specific product solutions.
Increasing borrowing power
Loughborough Building Society said it “recognises that some borrowers are able to afford a loan however the income multiple reduces their borrowing power.
“While those borrowers will still need to demonstrate the ability to afford the new mortgage, they will be able to borrow up to 5.5 times their income.”
Business development manager Ashley Pearson (pictured) added: “It’s great that we’re able to help even more borrowers afford their dream home, it’s important to take a common-sense approach to lending which I believe we do every day”.