The lender had previously capped the income it considered at a value equal to the customer’s basic salary plus allowances, but it will now consider bonus, overtime and commission income up to four times basic salary plus allowances.
As an example, a borrower with a basic annual salary of £30,000 per year earning £120,000 in commission would have previously been considered to have an income of £60,000. With the changes, this has been increased to £150,000.
Barclays has made several changes to its affordability this year, including changes to affordability calculations that allowed a family to potentially borrow up to £30,750 more. This is subject to application, financial circumstances and borrowing history.
The lender has also increased the maximum loan amounts for high-loan-to-value (LTV) purchases across all of its mortgages, going up to £640,000 for houses and £310,000 for flats.
Barclays also made a few enhancements for its self-employed, interest-only and buy-to-let (BTL) customers, allowing them to borrow more when buying a home.
Mind the affordability gap
Sponsored by Newcastle for Intermediaries
In addition, the firm brought out a Mortgage Boost product, allowing friends and family to boost the amount borrowed, and a zero-deposit mortgage for Right to Buy applicants.
Lee Chiswell, head of mortgages at Barclays, said: “We know that affordability is probably the greatest barrier for most consumers who want to buy a home. We’ve taken a long look at how we can support customers, particularly first-time buyers, and as a result, have made several tweaks to our lending criteria.
“Taken together, these will make all the difference for a range of people with different income types, getting people into homes that would previously have been out of reach.”
