The group said it would extend its FTB Boost to 5.5 times income, which is available through Lloyds Bank and Halifax.
This will increase the available borrowing by 22% for first-time buyers, so a household income of £50,000 with a deposit of 10% will increase the maximum loan available from £224,500 to £275,000.
Andrew Asaam, homes director at Lloyds Banking Group, said: “Buying your first home can be challenging, but FTB Boost helps by making your income go further. Recent affordability changes have already started to help would-be homeowners get on the property ladder sooner and lending an extra £4bn means we can help even more customers get the keys to their first home.”
Lloyds Banking Group launched the FTB Boost in August last year, and over £4bn of lending has already helped 11,000 first-time buyers borrowing more than 4.5 times their income.
Lloyds Banking Group said that since the group had clarified its mortgage stress testing rules in April, it had helped an additional 3,000 buyers – including more than 1,000 first-time buyers – who would not have been able to get on the property ladder previously.
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To qualify for the FTB Boost, customers need to apply for a first-time buyer mortgage with Halifax or Lloyds Bank, have a total employed household income of £50,000 or more, have a loan to value (LTV) of up to 90% and not use shared ownership or shared equity.
It is also subject to affordability checks.
