For borrowers with a loan to value (LTV) above 90 per cent and joint income of £50,000 or less, the new LTI will be tighter at four times income.
This limit will also apply to applications where there is a debt to income ratio of 20 per cent or more.
In a message sent to brokers, the lender said the LTI cut would also affect those offered cases where a material change has occurred that was reported after 28 August.
Barclays listed seven examples which it considered to be a material change in circumstances:
- An increase to the mortgage term;
- An increased loan amount;
- A change that results in increased outgoings/expenditure, for example adding a commitment or financial dependant;
- A reduction to the stated income;
- An increase to LTV;
- A change of repayment type;
- A change of borrower.
A Barclays spokesperson said: “We regularly review our lending policies and today have made some changes to loan-to-income multiples.”
In the note to advisers the lender said: “These changes also apply to any application that has been created and not submitted and to those that have been submitted but are yet to receive an offer.
“Please be advised if you do have a case that has not yet gone to offer, we will assess under the new policy and you will be notified of the outcome in the usual way.”
Prior to the change Barclays’ maximum LTI was 5.5 times income. The lender has also used the opportunity to simplify the number of LTI categories across its proposition.
Earlier this week the lender removed its daily cap on the volume of cases which it could accept, but added that there would be further changes coming.
