Contractors will no longer be limited to 4.49 times income while higher earners and customers remortgaging with no additional borrowing will have increased access to 5.5 times income.
For purchase or remortgage with additional borrowing, the LTI limit when income is under £50,000 is 4.49 times income, income between £50,000 and £74,999 comes to five times income and over £75,000 the limit stands at 5.5 times income.
A maximum 4.49 times LTI will be applied at all income levels if the loan is over 85 per cent loan to value (LTV), any part of the mortgage is interest-only, any applicant is self-employed or shared ownership.
To identify income levels from £50,000 to £75,000, and apply the LTI multiples, the lender will include basic pay, 60 per cent of allowable variable income and 100 per cent of pension for the two highest earning applicants.
For remortgage with no additional borrowing, up to 85 per cent LTV the LTI limit is 5.5 times and over 85 per cent LTV the limit stands at 4.49 times income.
The lender added that for a remortgage with no additional borrowing, income level and self-employment will not affect LTI limits. The LTI is capped at 4.49 times income if any part of the mortgage is interest-only.
Craig Calder (pictured), head of secured lending at Virgin Money, said: “We know that for customers getting the loan amount they need from a lender can sometimes be challenging. Virgin Money is committed to supporting people in meeting their financial goals, whether that’s getting onto the housing ladder or switching to deal that gives them value for money.
“That’s why we’ve made changes to our affordability assessment to better reflect customers’ individual situations, providing most customers with improved lending amounts. We’ve also reviewed our loan-to-income criteria to make it more simple and straightforward.”
The same changes have been made at Clydesdale Bank.
